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

China anticipates a significant market impact on Thursday, as a lock-up period for 14 million shares in MetaX Integrated Circuits is set to expire. This event follows a similar lock-up period for shares in AI chip firm Moore Threads, which last week led to an abrupt sell-off wiping nearly 49 billion yuan off the company's value.

Analysts predict MetaX will face considerable selling pressure when its restricted shares become tradable, a critical test for China's AI chip stocks amid the country's push to develop domestic alternatives to US graphics processing unit leader Nvidia. Both MetaX and Moore Threads enjoyed substantial market debuts in December, with their shares surging by several hundred percent due to investor hype, earning them the title of "four little dragons" in China's AI chip sector alongside Biren Technology and Enflame.

However, their stocks are now under scrutiny as some early investors aim to capitalize on their gains. When a lock-up period for 26 million shares in Moore Threads concluded last week, the company's share price plummeted 20 percent, breaching the Star Market's daily downward limit. The stock has since dropped over 30 percent, eroding tens of billions of yuan in market value.

Experts forecast a similar sell-off when MetaX releases its restricted shares, estimated at 6.7 billion yuan based on the company's Wednesday share price. Kenny Ng, a strategist at Everbright Securities International, stated that the stock price may experience significant selling pressure upon the release, depending on the initial investment cost of original investors.

Despite a 22 percent drop in shares last week, MetaX's early backers are still reaping substantial profits, boasting a 350 percent gain since the IPO in December 2025. Analysts maintain a positive outlook on MetaX's product roadmap, noting the company's first-half profitability in 2026 after reversing a previous loss.