Tech stocks in the spotlight following Cxmt’s record debut in Shanghai; St takes centre stage in Milan

(Il Sole 24 Ore Radiocor) - Technology shares are flying high, buoyed by a tailwind from Asia, where Cxmt, a Chinese memory manufacturer, made its debut on the Shanghai Stock Exchange, gaining as much as 500%, before closing with a 466 per cent surge, thanks to a massive influx of investors into one of the country’s leading players in the artificial intelligence sector. Thus, whilst the sector’s Euro Stoxx 600 index rose by 2.6 per cent, on the Milan Stock Exchange Stmicroelectronics – which in recent days had recorded double-digit falls in the wake of its results – is up 2.12% today, bringing its year-to-date gain to 113% (-11% over the past week, but +10% over the past three months). Infineon is also up (+1.9% in Frankfurt), as are ASM and ASML (+0.7% and +1.7% respectively in Amsterdam).

"Cxmt’s strong performance demonstrates the extent to which investors are taking a keen interest in companies operating in the semiconductor sector linked to artificial intelligence", although doubts remain as to whether the massive investments in AI can justify the valuations, say experts at Tickmill Group. Indeed, whilst this strong performance does not allay concerns regarding AI spending, it does show that investors continue to seek exposure to the chip sector, particularly when national policy and the development of AI infrastructure are aligned.

Turning to Cxmt, which closed at 49 yuan, the dynamic RAM chip manufacturer has reached a market capitalisation of around 3.3 trillion yuan (488 billion dollars), surpassing all other companies listed on the A-share market. “The opening price was in line with expectations, but the subsequent sharp rise was remarkable”, say experts at Beijing Xinhan Capital, explaining that “given the scarcity of stocks specialising exclusively in memory on the Class A share market, a period of speculative frenzy in the first few days of trading cannot be ruled out”.

Today, Cxmt accounted for almost 7 per cent of total trading volume on the Chinese onshore market. The group is now China’s second-largest listed company, behind Hong Kong-listed Tencent Holdings. With the funds raised through the IPO, Cxmt will have sufficient resources to compete with Samsung Electronics, SK Hynix and Micron Technology. It should be noted that, despite its impressive debut, the Chinese chip giant remains well below the market capitalisation of SK Hynix, which stands at $881 billion, and that of Micron, which stands at $1,000 billion.