Chinese AI Hardware Stocks Regain Momentum After Oracle's Cloud Contract Wins

By Sherry Qin

Chinese AI hardware stocks regained momentum after software giant Oracle's multibillion-dollar contract wins proved to investors that demand for AI-driven cloud computing remains high, easing concerns about tech companies' expensive valuations.

AI chip designer Cambricon Technologies, viewed as a potential future challenger to Nvidia, shot as much as 13% higher in Shanghai, while Chinese contract chip maker SMIC climbed by up to 8.6%. Fellow chip developer Hygon Information Technology surged by its daily permissible limit of 20%.

Thursday's strong, broad gains by semiconductor players reversed the benchmark Shanghai Composite Index's early losses, pushing it 1.65% higher. The Nasdaq-like ChiNext Price Index surged 5.15%, closing above 3000 for the first time since January 2022.

The advances came after database software provider Oracle said it won four multibillion-dollar contracts in its latest quarter and has $455 billion in outstanding contract revenue that it expects to collect for the latest quarter that ended in August.

Without mentioning all of the company's big-name customers, Chief Executive Safra Catz in the postearnings call said Oracle had signed "significant cloud contracts with the who's who of AI, including OpenAI, xAI, Meta, Nvidia, AMD and many others."

The U.S. tech titan's nearly half a trillion dollars in contracts has "stunned the market," Morningstar analyst Phelix Lee said.

"Oracle's blockbuster AI backlog reset the bar for global compute demand higher," Saxo chief investment strategist Charu Chanana said. "And Asia's hardware ecosystem quickly caught the updraft as a signaling effect."

Chinese stocks, especially tech hardware shares, had pulled back last week after posting big gains in August amid China's AI push and drive to produce chips locally. Analysts had previously voiced concerns about Chinese AI-related companies' stretched valuations and the speed of the rally that could alarm regulators.

The slump proved temporary, with Oracle's massive AI deals reviving market sentiment and giving Chinese investors another dose of confidence.

Morningstar's Lee said Oracle's emphasis on "AI inference" could have particularly excited the market, as the process of using a trained AI model to generate content represents real-life applications of the technology.

Global markets have also been seeking validation that the AI boom isn't turning into a bubble.

When U.S. tech leaders like Oracle and Nvidia show AI demand is surging, "it validates the case for Beijing to double down on its own compute capacity," Chanana of Saxo said.

As a result, "investors rush into local suppliers like Hygon or Cambricon as the best proxies," she said.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

September 11, 2025 03:40 ET (07:40 GMT)