CXMT overtakes Tencent as most valuable Chinese firm amid AI frenzy

CXMT has surpassed Tencent to become the most valuable Chinese company by market capitalization, driven by the AI-driven frenzy boosting memory chip stocks. Launched in Shanghai in July, CXMT quickly became China's largest onshore-listed firm and is now valued at US$524 billion, slightly higher than Tencent's US$510 billion. The shift in valuation reflects investors' growing preference for AI-linked hardware over traditional internet giants.

CXMT has emerged as a proxy investment for China's AI ambitions and semiconductor self-sufficiency goals, with its shares up 8 per cent since its debut. Gary Tan, a portfolio manager, noted that the market is signaling that chips are the new clicks. CXMT is also the world's fourth-largest producer of dynamic random-access memory, crucial for smartphones and advanced AI servers.

MSCI's inclusion of CXMT in its China All Shares Index, effective Aug 10, has added to the stock's momentum. Meanwhile, Tencent, known for its messaging app WeChat and game developer Riot Games, has seen its shares drop over 26 per cent this year, with a 4.5 per cent decline in Thursday's trading due to increased AI spending and pressure to compete with rivals.