Among the risks the company listed are those related to market expectations for its annual operating income forecasts, rumors of new product launches, an elevated price-earnings multiple, and supply chain risks.
Shares of Cambricon, a Chinese artificial intelligence (AI) startup considered a rival to Nvidia in the domestic market, deflated in Friday’s trading on the Shanghai Stock Exchange. The reversal came after the company clarified in a regulatory filing regarding the risks its investors should be aware of.
After ending Wednesday’s session up nearly 16%, Cambricon stock reversed course in Thursday’s session. By midday, the stock was retreating about 7.50%. According to a Bloomberg report, the stock was having its worst day since April.
Yet, Cambricon stock has had a stellar run this year.
Nvidia stock’s year-to-date (YTD) gain of over 34% pales before Cambricon’s over 140% jump. The U.S. chipmaker’s stock fell on Wednesday as investors worried about a potential slowdown in data center sales growth.
On Stocktwits, retail mood toward Nvidia’s stock remained ‘extremely bullish’ (86/100) and the message volume was also ‘extremely high.’
In the filing, the Beijing-based company noted the nearly 134% rally in its shares since late July, describing it as excessive when compared to the performance of shares in the industry, the Shanghai Composite Index, and a couple of tech-specific indices.
It flagged the potential for the stock to deviate from its fundamentals, posing downside risks to investors.
Among the risks the company listed are those related to market expectations for its annual operating income forecasts, rumors of new product launches, an elevated price-earnings multiple, supply chain risks, and the company being blacklisted by the U.S.
As such, Cambricon said, “Investors are advised to be aware of the investment risks and invest rationally.”
Earlier this week, the company reported first-half revenue of 2.88 billion yuan ($402.7 million), a 4,000% year-over-year (YoY) jump, and a record net profit of 1.04 billion yuan $145.37 million.
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