Cambricon doubled H1 revenue and more than doubled net profit, then fell 7% the next session

Cambricon released its 2026 half year report on August 7. First half revenue came in at about 6 billion yuan, up 108% from a year ago. Net profit hit roughly 2.3 billion yuan, up about 123%. By any normal standard those are blowout numbers. The stock dropped roughly 6.8% the next trading day.

The reason is not some broader AI chip selloff. It is company level deceleration. Second quarter revenue grew only about 8% sequentially from Q1, well below what the street had modeled after Q1 posted 160% year over year growth. Q2 year over year growth decelerated to roughly 76%. First half operating cash flow fell about 66% compared to the same period last year. The stock was already sitting at well over 100 times this year's projected earnings and about a quarter below the late June peak of 1,620 yuan before the results even dropped.

I have been watching this name because it is China's leading AI chip designer by market cap, and the revenue ramp has been real. But the print confirmed that the pace is slowing while the valuation has not adjusted. Good earnings, sell the news.

For exposure tracking, Cambricon is a holding in CNQQ, which runs about 100 names split roughly half A shares and half Hong Kong with a 10% single stock cap and semi annual rebalance. KWEB holds zero A shares and is internet focused. CQQQ applies a 25% A share inclusion factor.