Goldman Goes All-In On China's AI Champion, Hikes Cambricon Target To Stratospheric 2104 yuan
In a move that screams conviction—or perhaps desperation for yield in a complex market—Goldman Sachs has once again boosted its outlook for China's leading AI chip designer, Cambricon Technologies. Just a week after an initial upgrade, the firm's analysts have doubled down, hiking their 12-month price target by another 14.7% to a dizzying RMB 2,104 yuan. This new target, published in a September 1st report, now stands as the highest on the street.
The aggressive revision follows what Goldman calls "strong" second-quarter results for 2025 and is anchored in a powerful narrative: a domestic AI arms race, fueled by a tsunami of cloud capital expenditure from China's tech titans. With Beijing's unwavering policy support for technological self-sufficiency, Goldman is betting that Cambricon is uniquely positioned to capture the spoils of a protected and rapidly expanding market. The note is not just about one company; it's a window into Goldman's bullish thesis on the entire Chinese AI supply chain.
The Capex Tsunami
The foundation of this bullish outlook is the staggering capex being unleashed by China’s cloud service providers. After a period of caution, giants like Alibaba and Tencent are pouring capital back into AI infrastructure. Goldman analysts Verena Jeng and Allen Chang highlight this as a primary catalyst, noting the direct ripple effect on hardware suppliers.
China Cloud Capex in expansion: BABA’s 2Q25 capex beat at Rmb39bn (US$5.4bn), up 57% QoQ or 2x YoY; Tencent’s 2Q25 capex +119% YoY, was better-than-feared, and GSe raised 2025E / 2026E capex by 23% / 17%... Supportive AI policies: New guidelines were issued by the State Council... which sets up a target of 70%+ / 90%+ of new-generation intelligent terminals and AI agents penetration rate by 2027 / 2030 in 6 key sectors.
This two-pronged assault—massive private sector spending combined with top-down government mandates—creates a fertile ground for domestic champions. Goldman sees this as a clear signal that the "inferencing trend" powered by local chips is not just a concept, but a commercial reality that is scaling rapidly.
"Riding the Inferencing Wave"
For Cambricon, this translates into a dramatic upward revision of its future earnings. The bank has raised its net income forecasts for 2025-2030, with this year's estimate alone jumping 34%. Goldman projects a meteoric rise in Cambricon's market presence, driven by its expanding customer base moving beyond enterprises to major internet and cloud companies.
The report quantifies this explosive growth, forecasting a massive leap in both shipments and market share.
We model Cambricon’s AI chips shipment at 145k units in 2025E, to more than 1m / 2m units in 2028E / 2030E... We estimate Cambricon’s AI chips to contribute US912m/US912m/US6.1bn revenues in 2025E / 2028E, or 4% / 11% market share in China (vs. 1% in 2024).
This is a startling projection: a tenfold increase in market share in just four years. The bank argues that Cambricon’s "continuous R&D investments in both AI chips... and Software" will cement its leadership and enable it to effectively displace foreign competitors within China's walled garden.
The Valuation: To 2030 and Beyond
Of course, a target price of RMB 2,104 demands a heroic valuation. And Goldman delivers one, justifying it by looking far into the future—to 2030, to be exact. Acknowledging that near-term metrics are insufficient, the analysts base their target on a discounted EV/EBITDA multiple applied to 2030 earnings.
We continue to use a discounted EV / EBITDA to derive our 12m target price and continue to use 2030E as the base year, as EBITDA margins in 2030E (23%) are closer to global peers (NVIDIA / AMD at 66% / 26% in 2027E). We adopt a 69x EV / EBITDA multiple to 2030E EBITDA... Our new 12-m target price is at Rmb2,104.
This methodology, which implies a 45x P/E on 2030 earnings, is a bet not on what Cambricon is, but on what Goldman believes it will become five years from now. While the report argues this is "not stretched" compared to global peers' growth profiles, it underscores the high-wire act investors are being asked to believe in.
However, the bull case comes with stark, unavoidable risks conveniently listed deep within the report. And for those paying attention to the fine print, there's always the classic disclosure.
Key downside risks: 1) wafer supply restriction: Cambricon was added to US Entity list in Dec 2022, 2) slower-than-expected cloud chips development, 3) fiercer-than-expected competition in cloud chips.
And, of course:
Goldman Sachs beneficially owned 1% or more of common equity... as of the month end preceding this report: Cambricon.
Ultimately, Goldman is framing Cambricon as the designated winner of China's AI self-sufficiency mandate. The numbers are astronomical and the timeline is long, but with a tidal wave of state-directed capex, it's a narrative that the market, for now, seems eager to buy.