Recently, the star of the Chinese stock market, particularly the A-shares, has undoubtedly been Cambricon, often referred to as the "NVIDIA alternative." Following an extraordinary rise that saw its value almost quadruple last year, Cambricon has continued to thrive in 2025, achieving a remarkable increase of over 10% within the yearAs of January 8th, Cambricon’s stock closed at 726 yuan, bringing its market capitalization to an impressive 300 billion yuan.

As its stock price ascends, there are emerging divisions among public mutual funds regarding future projections for CambriconWhile some funds have persisted in increasing their stakes, making it their primary investment, others have opted to secure their profitsHowever, a consensus is forming among fund managers regarding optimism surrounding the artificial intelligence (AI) sectorThey affirm that the industry is in its early developmental stage, with the AI trend remaining a substantial focal point, despite potential structural adjustments in its growth trajectory

Demand for computational power continues to be robust.

Among the funds heavily invested in Cambricon, many have reaped considerable rewards during this stock price surgeBy the end of the third quarter of last year, 296 funds held a substantial position in Cambricon, totaling approximately 77.89 million sharesNotably, several funds have made Cambricon their largest holding, including Penghua Innovation Future and Wanjia Quality Life funds.

Moreover, Cambricon is a significant component in numerous indices, passively held by several exchange-traded funds (ETFs). Major stakeholders include various ETFs like the Huaxia Shanghai Stock Exchange Science and Technology Innovation Board 50 ETF, E Fund's Shanghai Stock Exchange Science and Technology Innovation Board 50 ETF, and the Huaxia Guozheng Semiconductor Chip ETF.

Cambricon's stock gained about 388% last year, distinguishing itself amidst thousands of other A-share stocks

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Even when faced with occasional pullbacks, it quickly regained lost groundAccording to third-quarter reports, numerous funds continued to unreservedly increase their holdingsFor instance, funds managed by Sun Quan of the Fortune Fund purchased an additional 667,500 shares, while the firm’s innovative enterprises enhanced their position by 36,100 sharesOther funds like Hua’an Media Internet and Guangfa Technology Innovation added 1.1129 million shares and 542,900 shares, respectively.

Sun Quan emphasized in his third-quarter report that AI represents a global technological innovation wave with rapid industry growth and immense market potentialHe pointed out that computational power serves as the foundational infrastructure for AI, which includes core semiconductors such as GPUs, HBM, and Switch, as well as supportive components like optical modules and PCBsHe also highlighted the end-user applications for AI found in smartphones, automobiles, and robotics, suggesting that AI-driven smartphones would lead to a demand for upgrades and accelerated advancements in autonomous driving.

“The long-term prospects for robotics are substantial

China has an array of excellent manufacturing companies benefiting from the global AI industry’s growthSimultaneously, it’s expected that a number of outstanding domestic AI semiconductor firms will emerge, benefitting from an expanding domestic market and rising market sharesThe development of China's AI industry could substantially spur growth in the semiconductor sector, including state-of-the-art wafer factories, storage facilities, and equipment suppliers,” stated Sun Quan.

With Cambricon being the flagship holding, along with semiconductor investments leading various sectors to new heights, the Fortune Emerging Industry Fund has appreciated over 50% since September of last year.

However, during this sustained growth phase, some funds have also opted to lock in profits after experiencing considerable gains from their investments in CambriconDuring the third quarter of last year, the ZhaoShang Advantage Enterprise and Southern Information Innovation funds cumulatively sold over 1 million shares, with Nuoan Active Return unloading more than 980,000 shares and subsequently dropping below the top ten positions.

Reflecting on the semiconductor market trends, Minsheng Jia Yin Fund anticipates that the electronics sector will benefit in 2024 from recovering demand post-inventory clearance, innovation in consumer electronics, growth in AI computational needs, and the ongoing push for domestic alternatives.

“In the past two years, investments in the AI sector have primarily focused on the infrastructure buildout relevant to computational power

Continuous innovations in large model architectures signify a potential for substantial growth, even as investments in computational power have persisted for two yearsUpon reaching a certain level of infrastructure, the real breakthrough in AI is expected to align with the expansion of multimodal application integration—for instance, the deployment of AI in education, autonomous driving, healthcare, and robotics is poised to spark a true investment explosionFuture focuses will lean toward progress in AI applications, new product sales, monthly active users of AI applications, and the exploration of new business models fueled by AIAny advancements in these areas are likely to trigger positive market reactions,” noted Minsheng Jia Yin Fund.

According to Jin Zicai of Caitsong Fund, maintaining an investment philosophy rooted in macroeconomic and industrial trends positions him to view technology and consumer sectors as ongoing focal points for market allocation

He maintains that the substantial AI trend is a primary direction as the industry remains in an early phaseOn one hand, with ongoing upgrades to overseas applications, demand for computational AI infrastructure will continue to grow, with noticeable timelines for realizationOn the other hand, with major domestic companies ramping up their capital expenditures, China's self-sufficient computational chip industry is expected to see improving data outcomes.

The manager of the Moore Digital Economy Fund, Lei Zhiyong, expects that 2025 may usher in a cycle of concentrated innovation, particularly in intelligent terminals based on AI, including smartphones, glasses, and headphones.

“Discussions in the market about whether the demand for computational power will decline by 2026 suggest a high likelihood of continued growth, albeit at a potentially lower rateFactors include a competitive landscape forming among major cloud giants, wherein escalating AI-capital expenditures may produce limiting growth rates, although absolute demand will likely not diminish