Kingsoft Cloud (KC, Financial) saw its stock rise by approximately 8%, driven by Nvidia's (NVDA) CEO Jensen Huang's visit to China and the company's announcement about receiving U.S. approval for exporting its H20 chips. Reports suggest that Huang met with Xiaomi's (01810.HK) and Kingsoft Cloud's chairman Lei Jun. Additionally, Chinese internet companies and cloud service providers are reportedly testing Nvidia's B30 chips and starting to place orders.
The B30 chip's performance is about 80% of the H20, but it offers competitive pricing at $6,000 to $8,500 per unit compared to the H20's $10,000 to $12,000 and domestically produced GPUs. Previously, Kingsoft Cloud faced chip supply constraints due to the H20 ban, which led to revenue-sharing with server rental firms and a reduction in its Q2 gross margin guidance to 14%. The company is projected to experience a low single-digit decline in adjusted operating profit margin for the year.
The potential deliveries of B30 and H20 chips present an opportunity to alleviate Kingsoft Cloud's chip shortage issues and improve profit margins. The company maintains an "outperform" rating with a price target of $17.
