Enflame shares soar 188% on Shanghai debut as Nvidia challenger taps investor fever for AI

Enflame Technology, a key competitor to Nvidia in China's artificial intelligence chip market, experienced an astonishing 188% increase in its share price during its debut on the Shanghai exchange on Friday. This performance catapulted the firm into a valuation of 176.4 billion yuan, or approximately $26.3 million, at the time of its listing. Trading began at 410 yuan, a price significantly higher than its initial offering price of 142.18 yuan.

The success of Enflame's debut mirrored a growing investor enthusiasm for domestic AI chip pioneers. In a stark contrast to the rest of the market, where the Star 50 Index fell by 1.3% and the CSI 300 Index dropped by 0.9%, Enflame's shares soared. The company raised approximately 6.12 billion yuan by issuing 43.04 million shares, valuing the firm at around 61 billion yuan before trading commenced. This made Enflame one of the biggest tech listings in mainland China this year.

The retail segment of the IPO was exceptionally popular, with an oversubscription rate of 4,073 times. Around 7 million individual investors placed orders for 42.1 billion shares, with the allocation to individual investors being a mere 0.025%, one of the lowest rates on the mainland market this year.

This meteoric rise underscores Enflame's significance in Beijing's strategy for achieving semiconductor self-sufficiency amidst escalating tensions between the US and China. Backed by Tencent Holdings, Enflame joined a group of "four little dragons" in the sector: Moore Threads, Biren Technology, and MetaX, all vying for prominence. The early investors, including GigaDevice, Xiaomi, Tongfu Microelectronics, and ZTE, saw their paper wealth surge following the listing.

Established in 2018, Enflame has rapidly expanded its business due to the burgeoning demand for AI computing power within China. The company anticipates its revenue to grow between 2.3 billion and 3 billion yuan in the first nine months of 2026, marking a year-on-year increase of up to 455%. Despite its rapid growth, Enflame is yet to turn a profit, as it continues to invest heavily in research and development.

Zhao Lidong, the company's chairman, expressed optimism about achieving profitability in 2026 or 2027, provided the current order book, delivery schedules, staff costs, and R&D plans hold firm.