Chinese AI Hardware Suppliers Biwin and Moore Threads See Stocks Plunge Despite Q3 Revenue Surge
Biwin Storage and Moore Threads reported strong Q3 results driven by AI demand, but shares fell over 10% on Thursday amid concerns about margins and cash burn.
Shares of Chinese semiconductor suppliers Biwin Storage Technology and GPU maker Moore Threads tumbled more than 10% on Thursday following the release of robust third-quarter earnings, reversing Wednesday's rallies. The market retreat highlights investor concerns over near-term margin pressures and cash burn outweighing long-term AI promises.
Beijing-based Moore Threads reported a nearly 1,774% surge in third-quarter revenue to 1.55 billion yuan (US$232.4 million), with net profit reaching 49.3 million yuan, or 20.1 million yuan excluding non-recurring items. The company attributed this rapid expansion to robust domestic demand for GPUs used in AI model training and inference across cloud providers, telecommunications operators, and computing centers. However, profitability remains fragile due to steep product development overheads; adjusted net loss for the first nine months was 130.7 million yuan, as R&D expenditure rose approximately 55% to 1.34 billion yuan, consuming nearly 41% of total revenue.
Meanwhile, Shenzhen-based Biwin posted a net profit of 1.6 billion yuan for the quarter ended September 30, up 525% year-on-year, while revenue more than doubled to 6.14 billion yuan, according to an exchange filing. The storage module maker cited resilient AI computing demand and a strong memory market cycle. Sales of storage products for emerging AI devices reached 4.82 billion yuan in the first nine months, up nearly 390%, serving tech giants including Google and Meta Platforms.
Despite the annual growth, sequential slowdowns raised caution. Calculations based on disclosures show Biwin's net profit slumped 62.5% from the second quarter, and revenue dropped nearly 30%. Both companies faced strained cash reserves due to capacity expansion: Biwin recorded a nine-month operating cash outflow of 10.04 billion yuan, while Moore Threads posted an outflow of 3.31 billion yuan, attributing the burn to rising procurement costs and strategic stockpiling.