Mad Cambrian (688256. SH), which has risen by more than 250% in more than three months, and its market value once exceeded 310 billion yuan, and the current share is close to 730 yuan, becoming second only to Kweichow Moutai (600519. SH) is the second most expensive A-share stock!

In the long run, since February 2024, Cambrian has increased by more than 700%.

What forces hype a chip startup that continues to lose money like this?

All kinds of signs point to:

Institutional huddle + ETF passive buying.

Cambrian, is it a "Zhuang stock"?

At present, there is a voice referring to the Cambrian as "Zhuang stocks".

Generally speaking, "Zhuang stocks" refer to small and medium-sized stocks that are highly controlled, under the control of the market maker, the stock price continues to rise, and finally speculates to a high level, the market maker makes a move, and small and medium-sized investors "take over".

Cambrian has now become an authentic large-cap stock, and in any case, it is not like a banker stock in the general sense.

However, public information is that throughout 2024, Cambrian's chips are constantly concentrated.

At the end of 2023, the number of Cambrian shareholders was 33,184, and it has decreased every quarter since then, and has decreased to 26,469 by the end of the third quarter of 2024. That is, retail investors are constantly being "washed out".

At the same time, institutions continue to enter the game:

At the end of the third quarter of 2023, there were 61 funds holding Cambrian, and by the end of the third quarter of 2024, there were 296.

In addition, in the process of Cambrian speculation, with the rapid growth of market capitalization, the company has been passively included in major indexes.

At the end of 2023, Cambrian will be included in the CSI 300; On December 13, 2024, Cambrian was transferred to the SSE 50 Index and the CSI A500 Index.

For stocks that are included in the index, the benefit is to get a buy from the index fund.

Theoretically, stocks that are unusually high in speculation, as long as no one does not take over, they will not be able to get leeks. However, if the stock price is so high that the index is passively included, the institutions that are holding together in the early stage can borrow the purchase of passive funds and leave the market safely.

From this point of view, Cambrian is not the "Zhuang stock" that we generally understand, if the early speculation has the component of the active group of institutions, in the middle and late stages, especially after the inclusion of the SSE 50, it is basically necessary to rely on ETF passive buying.

It is also "attributed" to the market style in recent months, since the so-called "bull market" of "924" A-shares in 2024, a large number of funds have entered the market through passive ETFs. If A-shares are as before, there are more active funds, then Cambrian will not be able to speculate now, because fund managers also have their own ideas.

So, the crazy hype of Cambrian is very accidental.

So, is Cambrian worth the price?

Obviously not worth it.

Will it crash? When will it collapse?

Then God knows.

Cambrian losses were never profitable. In 2020, Cambrian was listed on the A-share market, known as the "first stock of AI chips", and the problem of losses has not been solved so far. From 2017 to the first three quarters of 2024, the total loss was nearly 5.7 billion yuan.

The Cambrian hype logic is to benchmark against Nvidia. Some Cambrian investors firmly believe that Cambrian will become China's Nvidia in the future.

There is a view that Nvidia now has a high market capitalization, but it is actually accidental to do artificial intelligence, and Nvidia's graphics cards are not specifically designed for artificial intelligence, but for playing games. But Cambrian is a professional computing card for artificial intelligence, and over time, Cambrian is more awesome than Nvidia.

Tech growth stocks can tolerate losses. But the problem is that Cambrian is not only losing money, but R&D is also decreasing. In 2023, Cambrian's R&D expenses will be 1.118 billion, a year-on-year decrease of more than 26%, the first annual decline since its establishment. In the first three quarters of 2024, the company's R&D expenses decreased by 8.13% year-on-year.

Burning money and being stingy, how to hold back the big move, how to beat Nvidia?

There is also a logic, when the Cambrian period is developed to be able to wrestle with Nvidia, it means that China has made a major breakthrough in the industrial chain. At that time, was Cambrian the dominant family in the domestic AI chip market? Could it be that Cambrian can do it, other Chinese semiconductor companies can't do it?

Let's refer to today's new energy vehicles: how much excess profit will there be in the domestic high-end AI chip market? Will it also stage an involution fight?

Of course, for the hype participants who just want to have a good time, there is no need to worry about these things that are not there, and they just need to think about getting out of the bubble before it bursts.