CXMT made a huge leap during its first trading session on the Shanghai Stock Exchange, as its shares rose by as much as 535%, making it the largest listed company on the Chinese domestic market in terms of market capitalization, amid heavy investor interest in one of the most prominent companies that Beijing is counting on in the artificial intelligence race.
At its session high of 55.03 yuan, the company's market capitalization reached approximately 3.7 trillion yuan (equivalent to $547 billion), surpassing all companies listed on the domestic Chinese stock market.
This record listing came after the company raised up to 66.6 billion yuan in its initial public offering, the second-largest IPO in China's history, a move that reflects strong investor appetite for companies that play a pivotal role in Beijing's plan to build a self-sufficient domestic semiconductor industry.
China's biggest bet in the chip race
Formerly known as Changxin Memory Technologies, before becoming CXMT, the company is now China’s largest producer of memory chips and a major domestic competitor to foreign companies in the dynamic random access memory (DRAM) chip market, which is a key component in smartphones, data centers, and artificial intelligence servers.
The company currently ranks fourth globally in DRAM chip production, making it one of the rare opportunities that give investors the possibility of direct investment in China’s growing role in building the global artificial intelligence infrastructure.
Ou Fei, managing director at Beijing Xinhan Capital, said the stock's opening performance was largely in line with his expectations, but the sharp rise that followed the start of trading was remarkable.
He added that the scarcity of companies fully specializing in memory chip manufacturing within the Chinese stock market makes it likely that the wave of speculation will continue during the first days of trading.
Exceptional demand from individual investors
The company has received strong support from individual investors, along with attractive valuations and renewed indicators of government support for financial markets.
The retail investor portion of the IPO was oversubscribed by more than 212 times, with investors submitting approximately 9.4 million subscription requests to purchase shares with a total value of 7.07 trillion yuan.
This figure is roughly 10 times the value of subscription requests from individual investors in SpaceX's record-breaking IPO.
Part of this exceptional demand is due to Chinese regulators continuing to impose restrictions on company valuations at the time of offering, requiring companies to compare their valuations with their local and global peers, and ensuring that subscriptions are not overpriced to protect individual investors from losses.
This approach, during market recovery periods, leads to companies being offered at prices lower than actual demand levels, opening the door to strong gains in the first trading sessions.
AI boom drives stocks to record highs
Last year saw a wave of successful listings of companies linked to the artificial intelligence supply chain, achieving exceptional gains in their first trading sessions.
Shares of Simite Instruments jumped 876% on the first day of trading in April, surpassing the previous record of 693% set by MetaX Integrated Circuits Shanghai in December.
Shares of chipmaker More Threads Technology also rose by 425% during its first trading session last December.
Nevertheless, the semiconductor sector has seen notable fluctuations in recent weeks, after the massive listing of CXMT raised concerns among some investors that the AI-driven rally is nearing its peak.
Long-term confidence despite fluctuations
Many investors remain positive about the company's long-term prospects, believing that strong demand could provide support for the stock even if investor appetite for other chip stocks wanes.
Tseng Jicheng, a fund manager at Beijing Nuhua Investment Management, said that CXMT differs from many previous mega-IPOs because it has not yet reached its limits in terms of either technology or market share.
He added that the company still has enormous room for growth in the coming years.
Analysts believe that the company's successful listing could pave the way for initial public offerings for other companies in the sector, including Yangtze Memory Technologies and Baidu's chip unit, known as Conlongshin.
Reports also indicate that DeepSec may apply for a stock exchange listing this year.
Huge stakes on the company's future
Financial institution analysts are taking a more optimistic view of the company, as it combines two of the strongest investment trends at the moment: artificial intelligence and technological self-sufficiency in China.
Huashi Securities expects the company's market capitalization to reach 5 trillion yuan, based on a price-to-earnings ratio of 40 times for 2026 earnings.
The company's revenue is also expected to exceed 572.7 billion yuan by 2028, compared to an estimate of 277.7 billion yuan this year, with net profit rising to around 290 billion yuan.
In the same context, Nomura analysts initiated coverage of the stock with a buy recommendation, setting a target price of 116 yuan.
The bank believes that CXMT deserves to trade at a valuation twice that of its US rival Micron Technology, thanks to expectations of increased market share, along with the high valuation multiples typical of the Chinese stock market.
The report also indicated that the company may join the Stock Connect program linking the stock markets between mainland China and Hong Kong during the review scheduled for late August, with its inclusion in the program starting from mid-September at the earliest.
Nomura analysts concluded their forecast by noting that CXMT stock could continue its upward trend, achieving gains of up to 1,239% compared to the IPO price, if the company succeeds in increasing its market share and maintaining its growth pace over the coming years.
