AI frenzy drives Chinese tech valuations to multiples of US peers

On August 13, CXMT has surpassed Hong Kong-listed Tencent Holdings as the world's most valuable Chinese company, highlighting the AI-driven surge in demand for memory-chip stocks. With a market capitalization of US$524 billion (S$670 billion), CXMT's shares fell by 1.2 percent, but they still outpaced Tencent, whose valuation dropped to US$510 billion due to growing concerns over its AI investments. This shift in value reflects investors' preference for AI-related hardware over traditional internet giants.

CXMT has gained prominence as a symbol of China's AI ambitions and semiconductor self-sufficiency, with its stock rising 8 percent since its July debut, up from a 467 percent surge. Gary Tan, a portfolio manager at Allspring Global Investments, stated that CXMT exceeding Tencent signifies the market's belief in the growing significance of chips over internet clicks. Additionally, CXMT ranks fourth among global producers of dynamic random-access memory (DRAM), a crucial component for smartphones and advanced AI servers.

The inclusion of CXMT in the MSCI China All Shares Index, announced by MSCI in July, has further fueled its stock momentum, with the changes taking effect on August 10. Meanwhile, Tencent's assets, such as messaging app WeChat and game developer Riot Games, have suffered as shares declined by more than 26 percent in 2026. The tech giant more than doubled its AI spending in the June quarter to keep up with rivals, resulting in a 4.5 percent drop in its Hong Kong-listed stock on August 13.