Chipmaker CXMT becomes China's most valuable company
What's the story
CXMT Corp. has surpassed Tencent Holdings to become the most valuable Chinese company in the world. The shift highlights the AI-driven demand for memory-chip stocks. After debuting in Shanghai last month, CXMT quickly became China's largest onshore-listed company with a market capitalization of $524 billion on Thursday.
Market shift
Shift toward AI-linked hardware
The rise of CXMT over Tencent shows that investors are leaning more toward AI-linked hardware than traditional internet giants.
Gary Tan, a portfolio manager at Allspring Global Investments, said, "CXMT exceeding Tencent is a message from the market, chips are the new clicks."
He added that "Our sense is that the gap between the two will widen as agentic AI take increasing share of internet flows."
Strategic importance
CXMT's rise and semiconductor self-sufficiency push
CXMT is also the world's fourth largest maker of dynamic random-access memory, a key component in everything from smartphones to advanced AI servers.
The company's inclusion in the MSCI China All Shares Index on August 10 has further boosted its stock.
This makes CXMT a proxy trade for China's AI ambitions and semiconductor self-sufficiency push.
Tech giant's decline
Tencent's struggles and increased AI spending
Despite owning WeChat and game developer Riot Games, Tencent has struggled with its shares down over 26% this year.
The tech giant more than doubled its AI spending in the June quarter to keep up with rivals.
However, the move led to a 4.5% fall in its Hong Kong-listed stock on Thursday.