Before we dive into today’s big story, I want to take a quick moment to welcome you to the brand-new NXT Wave Research website.
This is now the official home of all my research services and newsletters. And here’s the best part: they’re now 100% owned and operated by me, Matt McCall.
That means no corporate middlemen, no marketers trying to steer my research, no trying to prop up a stock price, no outside agendas - just my insights, my research, and my vision for helping you ride the next wave of innovation and investing opportunities. I couldn’t be more excited to have you along for the journey.
If you’ve been with me for a while, you know I have a knack for spotting big trends and stocks before the crowd catches on. From past innovations to today’s megatrends, I’ve always believed the real opportunities show up early - long before they hit the mainstream headlines.
And that’s exactly what we’re seeing play out right now with Cambricon Technologies, the company quickly becoming known as the “Nvidia of China.”
When it comes to AI chips, Nvidia (NVDA) has been the undisputed leader, powering data centers, self-driving cars, and the generative AI boom. But in China, that dominance is facing cracks. Export restrictions, political friction, and rising national security concerns are eroding Nvidia’s position.
Into that void steps Cambricon Technologies - the company increasingly hailed as the Nvidia of China. And after this week’s stunning earnings report, that comparison doesn’t feel like an exaggeration anymore.
(FYI: The stock trades on the Shanghai Exchange with the stock symbol 688256.SS. There are a handful of brokers that allow you to buy stocks on the Shanghai Exchange.)
Nvidia’s H20 Problem
Nvidia once had a lifeline in China with its H20 chip, a special model designed to skirt U.S. export bans. But the honeymoon is ending. Beijing has grown wary, citing potential security vulnerabilities and “backdoors.” Production has been suspended, and even though U.S. officials granted export licenses earlier this year, delays are mounting. Analysts estimate Nvidia could lose $2–3 billion in revenue per quarter if Chinese demand for the H20 continues to falter.
For investors, that means Nvidia’s grip on the Chinese AI market is weaker than it’s been in years.
A Breakout Earnings Report
Cambricon is seizing the moment. In the first half of 2025, the company’s revenue exploded more than 40-fold, hitting roughly RMB 2.9 billion ($404 million). Net profit surged to over RMB 1 billion, compared to a half-billion yuan loss a year ago.
Take a look at how Cambricon just delivered the kind of numbers that grab Wall Street’s attention:
• Revenue for the first half of 2025 surged more than 40-fold to roughly RMB 2.9 billion.
• Net income hit RMB 1 billion, flipping from a half-billion loss last year.
• Shares have skyrocketed - up 133% since late July and 142% so far this year, hitting all-time highs.
That’s not just growth - it’s a turnaround story on steroids. A year ago, Cambricon was bleeding red ink. Today, it’s posting profits on par with the hottest names in the industry.
Beijing’s policy shift is playing a massive role here. Chinese tech giants are being encouraged - if not outright pushed - to switch from foreign semiconductors to domestic suppliers. And with plans to triple China’s AI chip output by 2026, Cambricon is positioned to be one of the biggest beneficiaries.
Why Cambricon Is Called “China’s Nvidia”
There are a few big reasons Cambricon has captured that title:
1. Policy Tailwinds – Beijing wants to reduce its reliance on U.S. tech, especially after restrictions on Nvidia’s advanced AI chips. Chinese giants like Tencent and ByteDance are being nudged to adopt Cambricon’s processors.
2. Competitive Chips – Its upcoming Siyuan 690 chip is rumored to match the performance of Nvidia’s high-end H100, while easily beating the “watered-down” H20 that Nvidia sells in China due to export controls.
3. Rising Ecosystem – AI startups, including DeepSeek, are already designing models on Cambricon hardware, helping create a domestic alternative to Nvidia’s CUDA ecosystem.
The Opportunity - and the Risk
This is where it gets interesting. On one hand, Cambricon looks like it’s on the verge of becoming the national champion for China’s AI push.
On the other hand, there are red flags:
• Valuation is sky-high, trading at more than 200x forward earnings - far richer than Nvidia itself.
• The company warned investors this week that it has no new products launching in 2025, meaning growth will have to come from scaling existing chips.
• And while shipments are climbing, Cambricon sold about 143,000 AI chips last year, compared to Nvidia’s 1 million units shipped into China.
So, while it’s riding a wave of policy support and investor enthusiasm, sustaining this kind of momentum won’t be easy.
McCall’s Take
History tells us that every tech revolution creates not one, but several winners. While Nvidia is the king of AI chips globally, Cambricon could very well become the default choice in the world’s second-largest economy.
This week’s record earnings show it’s no longer a speculative story - it’s a player. But the valuation frenzy means investors need to keep both eyes open.
In my book, Cambricon is one of the most fascinating “AI wildcards” in the market today. If you’re looking for the next Nvidia, this is a name you’ll want on your radar.
Here’s to the future,
Matt McCall
Editor, Market Insights
