--- title: "Goldman prices Cambricon at 40 times 2027 earnings on a US chip rule that is not final" description: "Goldman's November 11 China note, which no English-language outlet appears to have reported, prices the suppliers selling into the global build-out at 7 to 8 times 2027 earnings and Cambricon, the domestic substitute, at 40. Cambricon's 22% week rests on a US rule to bar Chinese labs from renting chips abroad, and that rule has not been finalized." publisher: "The Inference" section: "Chips" published: 2026-11-15T14:10:35.086Z modified: 2026-11-15T14:10:35.086Z canonical: https://theinference.org/article/goldman-prices-cambricon-at-40-times-2027-earnings-on-a-us-chip-rule-that-is-not-final language: en keywords: "Cambricon, Nvidia, China, AI Chips, Export Controls, Goldman Sachs" --- # Goldman prices Cambricon at 40 times 2027 earnings on a US chip rule that is not final > Goldman's November 11 China note, which no English-language outlet appears to have reported, prices the suppliers selling into the global build-out at 7 to 8 times 2027 earnings and Cambricon, the domestic substitute, at 40. Cambricon's 22% week rests on a US rule to bar Chinese labs from renting chips abroad, and that rule has not been finalized. Cambricon, the Shanghai-listed designer of China's closest substitute for [Nvidia](https://theinference.org/markets/companies/nvidia)'s AI chips, closed at ¥978.9 on November 13, up almost 22% for the week, while [Alibaba](https://theinference.org/markets/companies/alibaba) and [Tencent](https://theinference.org/markets/companies/tencent) lost a combined $74.9 billion of market value [1]. Nothing either side shipped that week explains the split; the timing points to policy. [Goldman Sachs' China strategy note of November 11](https://www.cronista.com/finanzas-mercados/el-golpe-a-la-ia-china-dejo-acciones-regaladas-cuales-son-las-favoritas-de-wall-street/), which no English-language outlet appears to have reported, prices both sides of that split [2]. Innolight and Eoptolink, whose optical transceivers move data between the servers of the world's AI data centers, trade at 8 times estimated 2027 earnings; Victory Giant, which makes the printed-circuit boards inside those servers, at 7 [2]. Cambricon, whose MLU accelerators are the domestic alternative, trades at 40 [2], and [UBS opened coverage at Buy on November 14](https://news.futunn.com/en/post/1004527613/ubs-group-initiates-coverage-of-cambricon-with-a-buy-rating) [3]. That is the substitution trade inside China priced at five times the build-out trade that serves the world. *Chart: **Cambricon's 2027 multiple towers over the rest of Goldman's China AI basket** Bar chart of price-to-estimated-2027-earnings multiples across Goldman's China Select AI basket, from 7 for Victory Giant, a printed-circuit-board maker, to 40 for the chip designer Cambricon; also includes foundry SMIC and chip-equipment maker NAURA* *Price to Goldman-estimated 2027 earnings, China Select AI basket, strategy note No. 80 of November 11, 2026, prices as of November 6, 2026; reported by El Cronista. [2]* ## The demand behind the rally is a draft rule, not an order book [Jensen Huang](https://theinference.org/markets/people/jensen-huang) resigned as Nvidia's chief executive on November 12, after revelations of extramarital affairs plunged the company into crisis [4]. The same day, House Speaker Mike Johnson said there was growing consensus in Congress on limiting chip exports to China, with [nine China chip-control bills pending](https://www.channelnewsasia.com/business/chinese-ai-shares-tumble-nvidia-jensen-huang-resigns-6548711) [4][1]. Separately, the Commerce Department was reported to be [preparing a rule barring Chinese AI companies from renting advanced chips through data centers abroad](https://uk.finance.yahoo.com/news/china-chip-stocks-rally-u-063831379.html), extending existing controls to seven more countries including Singapore and Thailand; it remains under interagency review [5]. ## The rule that feeds Cambricon cuts its customers' compute Close that rental route and substitution demand lands on Cambricon. Its third-quarter profit rose 148%, and its chips already run models from [DeepSeek](https://theinference.org/markets/companies/deepseek) and Moonshot [7]; the MLU690 series outperforms Nvidia's China-market H20 on tokens per second, [Morgan Stanley](https://theinference.org/markets/companies/morgan-stanley) estimates [6]. But most of China's AI labs "are still relying on Nvidia's solution", says Alex Yao, co-head of Asia technology, media and telecom research at JPMorgan [4], and tighter access will hit every Chinese company with an LLM business, says Morningstar analyst Chelsey Tam [4]. The rule that feeds the supplier cuts the compute of everyone who would buy from it. ## One ticket bets on a rule, the other on estimates holding Neither ticket is clean. [Goldman](https://theinference.org/markets/companies/goldman-sachs)'s exporter basket, at 11.6 times against 34.5 for the domestic leaders, is priced against modeled earnings growth of 44% a year to 2028 [2]. Cambricon's 40 times rests on 85% modeled annual growth over the same years [2], in a market where [MSCI](https://theinference.org/markets/companies/msci) China, the broad index of Chinese shares, has missed start-of-year earnings expectations nine years running [2]. Its own quarter shows the constraint: [third-quarter revenue of 3.5 billion yuan fell far short of forecasts](https://theinference.org/article/600-000-nvidia-h200s-wait-in-hong-kong-while-cambricon-misses-its-quarter) on a shortage of high-bandwidth memory, and inventory grew by almost as much as the quarter's entire sales [7]. ## The buyer pays before Washington decides The rule could be announced as soon as this month [5]. Three things settle the trade from here: the rule's final scope, whether any of the nine pending bills becomes law, and [whether the memory shortage eases enough for Cambricon to ship the demand it is being priced for](https://thenextweb.com/news/cambricon-q3-sales-miss-chip-supply) [7]. Cambricon is doing the real work of closing China's compute gap and may well earn the demand coming its way. At 40 times, the buyer pays for that work before Washington has decided to force the issue [7]. ## Takeaway Goldman prices Cambricon at 40 times 2027 earnings, five times the 7 to 8 times it gives the Chinese suppliers selling into the global AI build-out, and the 22% week behind that multiple rests on a US chip-rental rule still under interagency review. ## Sources 1. [FourWeekMBA, "Alibaba, Tencent Lose $74.9B in a Week; Cambricon Gains 22%", 13 November 2026](https://fourweekmba.com/ai-alibaba-tencent-lose-749b-in-a-week-cambricon-gains-22/) 2. [El Cronista, "El golpe a la IA china dejó acciones regaladas: cuáles son las favoritas de Wall Street" (Goldman Sachs global strategy report No. 80, 11 November 2026), collected 15 November 2026](https://www.cronista.com/finanzas-mercados/el-golpe-a-la-ia-china-dejo-acciones-regaladas-cuales-son-las-favoritas-de-wall-street/) 3. [Futu Niuniu News (Gelonghui), "UBS Group: Initiates coverage of Cambricon with a 'Buy' rating", 14 November 2026](https://news.futunn.com/en/post/1004527613/ubs-group-initiates-coverage-of-cambricon-with-a-buy-rating) 4. [Channel NewsAsia (Reuters), "Chinese AI shares tumble after Nvidia's Jensen Huang resigns", 13 November 2026](https://www.channelnewsasia.com/business/chinese-ai-shares-tumble-nvidia-jensen-huang-resigns-6548711) 5. [Yahoo Finance UK (Investing.com), "U.S., Europe chip stocks dip as Nvidia board reportedly weighs ousting Huang", 12 November 2026](https://uk.finance.yahoo.com/news/china-chip-stocks-rally-u-063831379.html) 6. [South China Morning Post via MSN, "Cambricon's third quarter profit surges 148% to US$210m amid push to replace Nvidia chips", 23 October 2026](https://www.msn.com/zh-hk/money/%E7%B6%93%E6%BF%9F/cambricon-s-third-quarter-profit-surges-148-to-us-210m-amid-push-to-replace-nvidia-chips/ar-AA2fURUa) 7. [The Next Web, "AI chipmaker Cambricon's sales miss points to tight chip supply in China", 23 October 2026](https://thenextweb.com/news/cambricon-q3-sales-miss-chip-supply) --- Goldman prices Cambricon at 40 times 2027 earnings on a US chip rule that is not final — The Inference. Canonical: https://theinference.org/article/goldman-prices-cambricon-at-40-times-2027-earnings-on-a-us-chip-rule-that-is-not-final