Tech & AI
Cambricon's third-quarter sales double to 3.5 billion yuan and profit rises 148%, but inventory swells to 11.7 billion yuan
China's leading listed AI chip designer is growing fast as Beijing pushes to replace Nvidia, but stock built up almost as quickly as it sold chips.
HedgeWeekly Tech & AI Desk ·
Cambricon Technologies, the Shanghai-listed designer of AI chips, said in a stock exchange filing on October 23 that revenue for the three months to September rose 104.5% from a year earlier to 3.53 billion yuan. Net profit attributable to shareholders climbed 147.7% to 1.40 billion yuan, about $210 million, from 566.6 million yuan. Revenue growth sped up from 75.8% in the second quarter, and the company credited continued market expansion and wider use of AI applications.
The balance sheet told a more mixed story. Inventory rose to 11.66 billion yuan at the end of September from 8.25 billion yuan at the end of June, according to figures from the filing compiled by the newsletter China AI Dispatch. That increase of about 3.4 billion yuan was nearly equal to the quarter's sales. Operating cash flow, the cash generated by day-to-day business, was negative 84 million yuan in the quarter, and cash on hand fell to 555 million yuan from 1.32 billion yuan.
Revenue for the first nine months reached 9.53 billion yuan. Cambricon has set a 2026 revenue target of at least 13.5 billion yuan under its staff share-incentive plan, which would require fourth-quarter sales of roughly 4 billion yuan. Its shares closed 5.5% higher at 932.20 yuan on Friday, about 42% below their June 30 close of 1,595.55 yuan, according to China AI Dispatch.
Why it matters: Cambricon is the main listed bet on China replacing Nvidia's chips with domestic ones, and its growth confirms strong demand from Chinese cloud and internet companies. The inventory build suggests that delivering finished chips, rather than finding buyers, is the bottleneck, as Chinese designers rely on limited advanced manufacturing capacity at home. Investors will watch whether that stock turns into fourth-quarter revenue, which would show whether China's AI chip supply is catching up with demand.