China’s AI chip stocks face crucial test as MetaX lock-up period expires

China is preparing for a potentially large sell-off of MetaX Integrated Circuits (MetaX) stock on Thursday, when a lock-up period for 14 million shares is set to expire. Analysts predict MetaX will face "significant selling pressure" upon the release of restricted shares, following a similar event last week for Moore Threads, which resulted in a 49 billion yuan (US$7.3 billion) loss in a single day.

The expiry of the MetaX lock-up period is seen as a critical test for China's AI chip stocks, which have attracted significant investment as the country seeks to develop domestic competitors to US giant Nvidia. Both MetaX and Moore Threads made their market debuts in December and experienced dramatic share price increases, positioning themselves as part of China's "four little dragons" AI chip sector alongside Biren Technology and Enflame.

However, recent share price declines have raised concerns among early investors, who may look to cash in on their gains. The anticipated sell-off is expected to put pressure on MetaX's stock price, with Kenny Ng, a strategist at Everbright Securities International, predicting the scale will depend on the initial investment costs of the restricted shares.

MetaX, which went public 12 days after Moore Threads, initially saw its shares drop by over 22 percent last week as investors preemptively sold positions. Despite the recent price drop, early institutional investors still hold substantial paper profits, with MetaX's IPO price being 104.66 yuan per share, and current trading at nearly 478 yuan.

Analysts maintain a positive outlook on MetaX's product roadmap, despite fierce domestic competition. The company began mass production of its next-generation C600 processor in May and is expected to gradually ramp up production during the second half of 2026 and 2027. MetaX also achieved first-half profitability in 2026, posting a net profit of 612 million yuan, following a loss of 186 million yuan the previous year.