China's top investment bank CICC said Cambricon, one of China's most valuable artificial intelligence chipmakers is a leading global AI chip design company that is poised to break NVIDIA's monopoly in the domestic market on the back of rising demand for semiconductor import substitution.
In its first coverage of Cambricon with an outperform industry rating, CICC analysts Huang Leping said in a report that they are optimistic about the company's competitiveness in China's cloud-based AI chip market, which is expected to take the lead in benefiting from growing demand for AI computing power.
The report expects Cambricon's market share to increase from 2.5% in 2019 to 4.2% in 2022.
China's cloud-based AI chips market will grow from 8.8 billion yuan in 2019 to 22.8 billion yuan by 2022, at a CAGR of 38%, the report said.
Smart computing centers are one of the key directions for new infrastructure, and the construction of smart computing clusters across the country is expected to accelerate in the future, providing ample momentum for the company's short-term growth.
CICC has a target price of RMB 204.97 on Cambricon, corresponding to an 18% upside potential.