Tencent is no longer China's most valuable company. The new market leader has been in the top spot for less than three weeks.

Chinese memory chip manufacturer CXMT Corp., which has been publicly traded for less than three weeks, has surpassed IT giant Tencent Holdings in market capitalization to become China’s most valuable company. Despite a 1.2% decline in CXMT’s share price on Thursday, August 13, the company’s market capitalization stood at $524 billion, compared with $510 billion for Hong Kong-listed Tencent, Bloomberg reported.

Shares of Tencent, which owns the WeChat messaging app and game developer Riot Games, fell 4.5% on Thursday following the earnings report. Investors were concerned by a twofold increase in capital expenditures, including those for artificial intelligence, in the previous quarter.

The leadership change in China reflects the fact that investors now prefer companies associated with AI hardware rather than traditional internet companies, according to Bloomberg. CXMT has become a sort of indirect bet on China’s ambitions in the field of artificial intelligence and on the country’s pursuit of technological sovereignty in semiconductor manufacturing, the agency notes.

“CXMT, which is outperforming Tencent, is a signal from the market: chips are the new clicks. “In our view, the gap between the two [companies] will widen as agent-based AI captures an increasing share of internet traffic,” said Gary Tan, portfolio manager at Allspring Global Investments, in a Bloomberg report.

CXMT ranks fourth in the world among manufacturers of dynamic random-access memory (DRAM). These chips are used in a very wide range of devices, from smartphones to advanced artificial intelligence servers. Bloomberg notes that CXMT’s stock received additional support following MSCI’s decision to include the company in the MSCI China All Shares Index.

CXMT made its debut on the Shanghai Stock Exchange in late July, marking the largest IPO in mainland China since 2010. On the first day of trading, its shares soared 466% above the offering price, making it the most valuable company traded on mainland Chinese stock exchanges (excluding Hong Kong). Since then, the stock has gained another 8%.

Analysts attributed the buzz surrounding the chipmaker’s stock to high demand for memory for artificial intelligence data centers and Beijing’s push to build its own supply chain, shielded from U.S. export restrictions. Among DRAM manufacturers, CXMT is second only to South Korea’s SK Hynix and Samsung Electronics, as well as the U.S.-based Micron, the Financial Times reported.

This article was AI-translated and verified by a human editor