Cambricon tumbled sharply in Shanghai trading, with shares slipping as much as nearly 10% intraday and the company’s market capitalisation retreating below RMB 500 billion. The rout rippled through the domestic AI-chip cohort: Moore Threads and Muxi each fell more than 3% as investors reassessed winners and losers in China’s fast‑moving semiconductor race.
The selloff followed two pieces of news that complicated Cambricon’s recent upbeat narrative. Alibaba’s chip arm quietly published details of a new high‑end AI chip called “Zhenwu 810E,” while separate industry sourcing suggested the Zhenwu PPU’s shipments reached the hundreds of thousands in 2025 — a scale the market interpreted as surpassing Cambricon’s volume and placing Alibaba’s in‑house silicon among the leaders in the domestic GPU/PPU field.
That jitter arrived even as Cambricon issued a bullish earnings preview for the full year 2025. The company said it had swung to profit, forecasting net income attributable to shareholders of RMB 1.85 billion to RMB 2.15 billion and adjusted net income of RMB 1.6 billion to RMB 1.9 billion. Revenue is expected to jump to RMB 6 billion–7 billion from just RMB 1.174 billion in 2024, reflecting meteoric growth driven by rising AI compute demand and expanded commercial deployments of Cambricon’s products.
The juxtaposition — an operational turnaround versus fresh competitive pressure — helps explain the market’s reaction. Investors rewarded historical and prospective growth only so long as the company’s competitive lead appeared durable. The appearance of a credible rival from Alibaba, one of China’s largest cloud and internet platforms with tight access to large internal customers and ecosystems, raises questions about share retention, pricing power and long‑term margins for incumbent chipmakers.
Beyond Cambricon and Alibaba, the episode highlights a broader dynamic in China’s semiconductor landscape. Domestic suppliers are scaling rapidly, cloud providers are vertically integrating silicon into their stacks, and investors are quick to reprice companies when technological leadership or go‑to‑market advantages look contested. For Cambricon, the task will be to translate its recent revenue surge into defensible partnerships, sustained performance advantages and evidence that customer wins are sticky rather than fleeting.