Chinese memory maker CXMT overtakes Tencent to become China's most valuable company

Chinese memory chip maker CXMT has become the most valuable listed company in China just weeks after its debut on the Shanghai Stock Exchange. The company's market capitalization has surged to $524 billion, surpassing the previous leader, internet conglomerate Tencent, whose valuation dropped 4.5% to $510 billion.

According to Bloomberg, the diverging fortunes of the two companies are tied to the artificial intelligence boom. Investors believe CXMT stands to benefit directly from growing demand for memory chips used in AI infrastructure, while Tencent is spending heavily on AI without clear prospects of financial returns. Since the start of the year, Tencent shares have lost more than 26% of their value. The two companies trade on different exchanges — Tencent is listed in Hong Kong, while CXMT is listed in Shanghai — but they are now competing directly for the title of China's most valuable company.

On its market debut, CXMT shares surged 467% before settling into a more moderate trajectory. The stock later gained a further 8%, though it slipped 1.2% in the latest trading session. Analysts at Allspring Global Investments expect the gap between CXMT and Tencent to keep widening, as AI-related workloads consume an ever-growing share of internet traffic, driving demand for memory chips.

CXMT currently ranks fourth among the world's largest DRAM manufacturers. The top three players control more than 90% of the global memory market, while CXMT holds no more than 9%. However, the company is aggressively expanding production capacity and could eventually break into the top three, challenging the established leaders in the coming years. The rapid rise of CXMT reflects broader shifts in China's technology sector, where hardware companies tied to the AI boom are increasingly favored by investors over traditional internet platforms struggling to monetize their AI investments.