In a stunning display of investor frenzy, shares of Chinese semiconductor company MetaX Integrated Circuits Shanghai Co. exploded on their first day of trading, posting a monumental gain that has set a new benchmark for the country's financial markets. The stock's astronomical rise underscores the intense appetite for companies positioned in the critical artificial intelligence chip sector, especially those seen as potential domestic alternatives to global leaders.
A Historic Market Debut
The company's shares, which were priced at 104.66 yuan in its initial public offering (IPO), witnessed an unprecedented surge of 693% when they began trading on Wednesday. This extraordinary leap is not just a headline-grabber; according to data compiled by Bloomberg, it represents the best first-day performance by a Chinese IPO in the $500 million to $1 billion range over the past ten years. The rally propelled MetaX's market capitalisation to a staggering over 332 billion yuan (approximately $46 billion), instantly establishing it as a heavyweight on the Shanghai Stock Exchange's STAR Market.
The euphoria surrounding MetaX's listing had a ripple effect across the board. The chip-sector-focused STAR 50 Index climbed 2.5%, while the growth-oriented ChiNext Index gained 3.4%, lifted by the positive sentiment emanating from this blockbuster debut.
Betting on China's AI Chip Champions
The investor mania is not occurring in a vacuum. MetaX designs and sells graphics processing units (GPUs) tailored for artificial intelligence workloads, placing it squarely in one of the world's most strategically contested and rapidly growing industries. The company's roots are notably linked to US chip giant Advanced Micro Devices (AMD), with key founders like Chairman and CEO Chen Weiliang having previously worked there.
In 2024, MetaX's AI-focused Xiyun C500 series accounted for nearly 98% of its total revenue. The firm claims these chips are comparable to Nvidia's A100 GPU. This is a crucial detail, as Chinese investors are heavily backing companies like MetaX that could emerge as viable competitors to Nvidia, whose most advanced chips are restricted from sale to China under US export controls. According to its prospectus, MetaX captured about 1% of China's AI chip market last year, operating in a sector booming due to domestic substitution drives and widespread AI adoption.
Overwhelming Demand and Regulatory Context
The hunger for a piece of MetaX was evident well before the shares started trading. The IPO was 2,986 times oversubscribed by retail investors, even surpassing the already massive oversubscription of 2,750 times seen for fellow AI chip firm Moore Threads Technology. This pattern of explosive debuts is becoming a trend. Moore Threads' shares had quintupled on their first trading day earlier and have jumped more than sixfold over eight sessions, with its market value now at 336 billion yuan, similar to MetaX's.
Analysts point out that such sky-high demand and first-day pops are partly a function of China's cautious regulatory approach to IPO pricing. Authorities often limit initial valuations to protect retail investors, which can lead to a significant supply-demand imbalance and dramatic price surges when trading begins. This year, Chinese IPOs have averaged a 250% gain on their first trading day.
Despite its massive valuation, MetaX trades at a price-to-sales ratio of 56.4, which is notably lower than the peer average of 127.4 that includes firms like Cambricon Technologies Corp. and AMD itself. This metric suggests that, in the context of its hyper-growth sector, some investors may still see relative value, betting on the company's future revenue expansion as it battles for a larger share of China's crucial AI chip market.
