#GoldmanSachsBullishOnCXMT

CXMT (688825.SS) has delivered one of the most explosive semiconductor rallies of 2026.

From its ¥8.66 IPO price, the stock surged more than 465% on its first trading day, closing near ¥49.01, and subsequently pushed toward the ¥61.80 all-time high. From the IPO price to ¥56.60, the gain is approximately 554%, meaning investors who bought at ¥8.66 saw the stock rise by nearly ¥47.94 per share. This is no longer a normal post-IPO move; CXMT has entered a high-momentum, high-volatility phase where fundamentals, AI-memory demand, valuation and China’s semiconductor strategy are all being priced into the stock.

The fundamental transformation is the strongest part of the CXMT story. Its reported trailing revenue is around ¥106.4 billion, while net income is approximately ¥28.2 billion.

Current financial data shows a gross margin around 61.25%, operating margin around 48.08% and net profit margin around 26.50%.

Compared with the company’s deeply negative margins in previous years, this represents an extraordinary improvement in operating efficiency. FY2025 revenue was about ¥61.8 billion, meaning the trailing revenue figure is roughly 72% higher than FY2025 revenue. The key question is whether CXMT can maintain these margins once the memory cycle becomes less favorable.

Growth expectations remain extremely powerful because AI infrastructure is increasing demand for DRAM and high-bandwidth memory. CXMT is investing heavily in next-generation G5 technology, HBM3 development and additional manufacturing capacity. Counterpoint estimates CXMT currently holds roughly 9% of global DRAM bit shipments and could reach around 11% by 2028, while the company is targeting major capacity expansion. Reuters has also reported plans for another 12-inch DRAM plant in Beijing, with existing fabs already operating at significant monthly wafer capacity. If these investments translate into higher yields, better products and greater market share, CXMT could continue improving both revenue and efficiency.

The AI-memory opportunity is potentially the biggest long-term catalyst. HBM is becoming strategically important because AI accelerators require enormous memory bandwidth. If CXMT successfully commercializes HBM3 and progresses toward more advanced generations, the company could move from being primarily a domestic DRAM supplier toward becoming a meaningful participant in the premium AI-memory market. That could dramatically increase its addressable market. However, HBM requires extremely high manufacturing quality, yield and customer qualification, so investors should treat successful commercialization as an upside catalyst rather than a guaranteed outcome.

The bullish case becomes even stronger when looking at China’s semiconductor self-sufficiency strategy. CXMT is already the fourth-largest DRAM producer globally, behind Samsung, SK Hynix and Micron, and China has a major domestic demand base for memory. The company’s expansion therefore has both commercial and strategic importance. If Chinese technology companies increasingly prioritize domestic memory suppliers, CXMT could gain market share even while competing against much larger international players. The company’s IPO raised approximately $8.5 billion, providing substantial capital for capacity expansion and technology development.

But valuation is the biggest warning signal. Around ¥56.60, CXMT is already trading at a massive premium to its IPO price of ¥8.66. The move from ¥8.66 to ¥56.60 represents approximately 553.6% upside, while the move from the ¥49.01 debut close to ¥56.60 represents another roughly 15.5% increase. The stock’s reported trailing P/E is around 130x, while forward P/E is near 21.6x. That difference tells us the market expects earnings to grow dramatically. If earnings continue accelerating, the forward valuation can become more reasonable; if earnings disappoint, the stock could experience a severe valuation compression.

Analyst expectations demonstrate just how uncertain the valuation has become. The current five-analyst consensus target is approximately ¥63.36, representing around 12.9% upside from the latest reference price of ¥56.16. Compared with the IPO price of ¥8.66, however, even ¥63.36 would represent approximately 631% total appreciation.

Nomura’s much more aggressive ¥116 target would represent roughly 105% upside from ¥56.60 and approximately 1,239% above the IPO price. This huge difference between conservative consensus expectations and the bullish ¥116 scenario shows that CXMT’s future valuation depends heavily on DRAM pricing, market-share gains, HBM execution and margin sustainability.

From a technical perspective, ¥61.80 is the most important immediate resistance because it represents the all-time high. A decisive breakout above ¥61.80 with strong volume could create a fresh momentum phase toward ¥65, ¥68 and ¥70. A move from ¥56.60 to ¥65 would represent approximately 14.8% upside; ¥68 would mean around 20.1% upside; and ¥70 would represent roughly 23.7%. If momentum becomes extreme, ¥80 becomes a major psychological target, representing approximately 41.3% upside from ¥56.60. A move toward ¥90 would represent nearly 59% upside, while Nomura’s ¥116 target would require approximately 105% upside from ¥56.60.

The downside levels are equally important. The ¥54–¥55 zone is the first support area. From ¥56.60, a decline to ¥54 represents approximately -4.6%, while ¥50 would represent approximately -11.7%. The ¥49.40–¥50 region is therefore a major decision zone. If buyers defend it, the broader bullish structure could remain intact. A fall toward ¥45 would represent approximately -20.5%, while ¥43.50 would mean approximately -23.1%. The ¥42–¥44 region is a much deeper support area, and a move to ¥40 would represent approximately -29.3%. Below ¥38, the stock would be roughly 32.9% below ¥56.60 and the post-IPO bullish structure would face serious technical damage.

For an aggressive trading plan around ¥56.60, SL1 at ¥53 represents approximately -6.4%, SL2 at ¥49 represents approximately -13.4%, and SL3 at ¥43.50 represents approximately -23.1%.

On the upside, TP1 at ¥61.80 offers approximately +9.2%, TP2 at ¥68 offers approximately +20.1%, and TP3 at ¥80 offers approximately +41.3%. A more conservative strategy would be waiting for a pullback toward ¥54–¥55 or ideally ¥49.40–¥50, followed by confirmation that buyers are returning. This provides a better risk-to-reward setup than aggressively buying after a 500%+ post-IPO explosion.

Market sentiment remains strongly bullish but extremely speculative. The stock’s enormous post-IPO appreciation shows powerful demand, while the limited free float can amplify both upward and downward moves. At the same time, geopolitical restrictions and competition from Samsung, SK Hynix and Micron remain major risks. CXMT’s technology gap, access to advanced equipment and the cyclical nature of DRAM pricing must also be monitored closely. A strong memory cycle can push earnings sharply higher, but a future oversupply could produce the opposite effect and compress margins rapidly.

My overall view is bullish on CXMT’s long-term business potential but cautious on the current stock price. The fundamental story is impressive: revenue has expanded dramatically, margins have improved, AI-memory demand is accelerating, capacity is expanding and China’s domestic substitution strategy provides a structural demand driver. But a stock that has already gained more than 550% from ¥8.66 requires exceptional execution simply to justify its current valuation. The key levels are clear: above ¥61.80, momentum could target ¥65–¥70 and potentially ¥80; around ¥54–¥55, buyers need to defend the trend; below ¥49, correction risk increases sharply; and below ¥38, the bullish structure would be seriously damaged.

The best risk-adjusted approach is therefore patience rather than FOMO. CXMT can absolutely continue higher if DRAM prices remain strong and HBM3 execution succeeds, but after a 553%+ rise from the IPO price, every additional 10% gain comes with increasing valuation risk. I would prefer buying controlled pullbacks rather than chasing vertical candles. If ¥61.80 breaks convincingly, ¥68 and ¥70 become realistic momentum targets, while ¥80 becomes the aggressive bull-case target. If the stock instead falls toward ¥50 and successfully establishes support, the risk-reward profile becomes considerably more attractive. CXMT has genuine fundamental upside, but with price targets ranging from conservative levels near ¥63 to an aggressive ¥116, volatility is the one factor investors can be certain about.