Chinese memory chip manufacturer ChangXin Memory Technologies (CXMT) has overtaken Tencent in market capitalization to become the country’s most valuable company. CXMT’s market value reached $524 billion, while Tencent ranked second with a market value of $511 billion.

The decline in Tencent’s market share following increased investments in artificial intelligence played a decisive role in this change. In the second quarter of the year, Tencent increased its capital expenditures on information processing capabilities for AI models and spyware by 176 percent year-on-year to 52.8 billion yuan.

While Tencent experienced a decline, CXMT continued its rise

Although Tencent’s second-quarter revenue reached 204.8 billion yuan, an 11% increase year-over-year, the company’s shares traded in the US fell by 5.34% following the announcement. The total loss in Tencent shares for 2026 reached 26%.

A portion of Tencent’s spending on artificial intelligence infrastructure is directly transferred to CXMT. In June, the company signed a $3 billion server DRAM agreement with CXMT. CXMT also signed a five-year server DRAM agreement worth over $7 billion with ByteDance in July.

CXMT’s share of total server product revenue increased from 8.4% in 2024 to 26.5% in 2025. The company’s share of the global DRAM market was recorded at 7.67% in 2025. CXMT aims to increase this rate to 30% by 2030.

Price increases in the memory market also positively impacted the company’s financial performance. CXMT reported an operating profit of 35.43 billion yuan in the first quarter of 2026. A year earlier, in the same period, the company had recorded an operating loss of 2.83 billion yuan.

Rapid rise in the stock market and analyst opinions

CXMT went public on the Shanghai Stock Exchange on July 27 and raised $8.6 billion. Demand from individual investors reached 212 times the shares offered, and the company’s shares gained 466% in value on the first day of trading.

Analysts, however, have differing opinions on the sustainability of this new peak reached by CXMT. Nomura points to the upside potential with a price target of 116 yuan, while Morningstar argues that the current price is more than three times the company’s true value.

This situation highlights how the increase in AI investments has changed the price distribution between chip manufacturers and technology companies. While large technology companies like Tencent are spending billions of dollars on AI infrastructure, a significant portion of these investments supports the revenues of hardware manufacturers like CXMT. Do you think this rapid increase in CXMT’s market value is sustainable?