The tale of profitability has only just commenced.

Editor: Kele

Reviewer: Wendao

Source: Shoucai - Shoutiao Finance Research Institute

Cambrian Technologies, once dubbed a 'money-burning machine,' has undergone a remarkable transformation into a 'profit-generating powerhouse,' reshaping external perceptions with its rapid evolution.

On August 8th, the company unveiled its 2026 mid-year financial results: revenue soared to 5.996 billion yuan, marking a 108.13% increase year-on-year; net profit attributable to shareholders reached 2.311 billion yuan, up 122.61% from the previous year; and net profit after non-recurring items stood at 2.166 billion yuan, a 137.3% surge year-on-year. Breaking it down by quarters, the first quarter yielded profits of 1.013 billion yuan, while the second quarter soared to 1.298 billion yuan. Sustaining double-digit profitability for two consecutive quarters, coupled with non-recurring profit growth outpacing attributable profit, underscores both the speed and quality of its performance.

Diving deeper into the revenue streams, cloud-based products contributed a staggering 99.98% of the total revenue, with edge products contributing a mere 877,200 yuan. Essentially, Cambrian Technologies has transitioned into a purely cloud-based AI chip company. The financial report attributes this growth primarily to deep collaboration with leading financial and internet clients, with products achieving widespread commercial deployment in scenarios such as large-scale model training, search recommendations, and beyond. Furthermore, expansion into smart grids, smart mines, and even retail supermarkets has seen AI chips being utilized for customer flow statistics and loss prevention, with computational power penetration occurring at a faster pace than anticipated.

Looking forward, there are promising indicators for continued growth. Just a week prior to the release of the mid-year report, Cambrian Technologies announced a significant incentive plan: it intends to grant 5 million restricted shares to 945 employees at a grant price of 750 yuan per share, equating to a market value of approximately 5.7 billion yuan. Over 80% of the employees are included in this incentive scope, with the shares vesting over a four-year period.

Actions indeed speak louder than words. The boss's willingness to share the benefits and deeply integrate the team is far more impactful for a technology company than a hundred slogans could ever be.

However, amidst these positive developments, there are underlying issues that warrant attention.

Firstly, there is a need to be cautious of concentration risk. Nearly all revenue is derived from cloud-based chips, with purchasers concentrated among a few leading internet and financial institutions. Any changes in this clientele could potentially trigger performance fluctuations.

Secondly, edge computing and end-side capabilities remain relatively weak, accounting for less than 1% of the revenue. While this may not constitute a strategic misstep, the next wave of growth in AI computational power is likely to emerge from end-side and edge-side applications. Should this market materialize sooner than expected, Cambrian Technologies will require time to catch up.

Thirdly, the vesting schedule of the incentive plan entails significant share-based compensation expenses each year for the next four years. These expenses will continue to impact the profit statement, and it remains to be seen whether the strong profit growth trend can be sustained.

Historically, Cambrian Technologies has been one of the more contentious AI companies listed on the A-share market, with years of losses and sustained capital expenditure leading to market doubts about its viability. Now, with net profits exceeding 2 billion yuan in 2025 and surpassing 1 billion yuan in each of the first two quarters of 2026, its profitability is accelerating, at least demonstrating that Chinese AI chip companies can achieve a sustainable commercial closed loop.

However, market pricing is forward-looking. The stock's strong performance in the first half of the year was driven by the market's anticipation of more distant prospects—whether it can sustain growth, secure major clients for the next generation of products, optimize its client structure, and extend its cloud-based advantages to more scenarios. These questions were not directly addressed in the mid-year report but will ultimately determine the future trajectory of the stock price.

The future heralds an era of AI and computational power. For China's related industries to achieve a leapfrog and maintain their leadership position, they rely on the guiding influence of a cohort of leading companies. As the 'pioneer AI chip stock,' Cambrian Technologies has entered profit-making mode, which is commendable. Next, it must demonstrate its ability to continue generating profits—more valuable and sustainable ones.

The profit story of the 'AI King' has only just begun.

This article represents original content from Shoucai.

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