Defying profitability concerns and US sanctions, Moore Threads exploded onto the Shanghai STAR Market today. Shares of the Beijing-based Graphics Processing Unit (GPU) maker surged over 400% on debut, valuing the unprofitable company at roughly $7.5 billion.
Investors are betting heavily on Beijing’s push for “sovereign AI” to replace Nvidia, ignoring the company’s cumulative 5 billion yuan loss. Raising $1.1 billion, the listing provides a critical war chest to accelerate R&D for domestic chip alternatives.
The Valuation Paradox: Hype vs. Fundamentals
Trading under the ticker 688795.SS, shares opened at 650 yuan, a significant 468% increase from the IPO price of 114.28 yuan. Volatility remained high throughout the session, with the stock touching 688 yuan before settling to close at 600.5 yuan.
Prior to the bell, retail interest reached fever pitch, with shares oversubscribed more than 4,000 times according to retail oversubscription data. Such demand reflects a market less concerned with current balance sheets than with the scarcity of investable AI assets in China.
Despite the euphoria on the trading floor, the company’s prospectus paints a different picture. William Xin, Chairman of Spring Mountain Pu Jiang Investment Management, noted that “the price is beyond my understanding… A stock cannot defy gravity and fly into the stratosphere.”
Financial realities underpin this skepticism. Over the past three years, Moore Threads has accumulated 5 billion yuan in losses.
While revenue is accelerating (H1 2025 figures reached approximately 700 million yuan, surpassing the full year 2024), the company remains deeply in the red with a net loss of roughly 724 million yuan for Q1–Q3.
By traditional metrics, the pricing model appears detached from fundamentals. Based on 2024 sales, the company is trading at a Price-to-Sales (P/S) ratio of 123x. For comparison, the average P/S ratio for its peers on the STAR Market sits at 111x, indicating a premium driven largely by sentiment rather than superior margins.
Moore Threads – Growth & Valuation Snapshot
| Metric | 2022 | 2023 | 2024 | 2025 H1 | 2025 Q1–Q3 | Notes |
|---|---|---|---|---|---|---|
| Revenue (CNY bn) | ||||||
| Revenue | 0.05 | 0.12 | 0.44 | 0.70 | 0.78 | Strong acceleration; 2025 H1 already > full-year 2024. |
| Net loss (CNY bn) | ||||||
| Net loss | -1.84 | -1.67 | -1.49 | -0.27 | -0.72 | Losses narrowing in 2025, but still material vs revenue. |
| Valuation multiples (×) | ||||||
| Moore Threads P/S on 2024 sales, IPO issue price |
– | – | ≈122 | – | – | Static price-to-sales on 2024 revenue at RMB 114.28 issue price. |
| SSE STAR Chip Index P/E | – | – | – | ≈118 | – | Earnings multiple for China’s STAR Chip index around listing. |
| Shanghai Composite P/E | – | – | – | ≈12 | – | Broad-market earnings multiple for comparison. |
Regarding the influx of capital, management has laid out a specific roadmap in its listing documents. Acknowledging that the firm has yet to turn a profit, the prospectus designates the IPO proceeds for the acceleration of core research and development.
The priority is the fabrication of new-generation, self-developed GPUs designed specifically for AI training and inference, a necessary evolution to reduce reliance on older architectures and justify its valuation.
This capital injection is essential for survival, not just growth. Observers view this liquidity event as a race against the clock rather than a victory lap. Abraham Zhang, Chairman of China Europe Capital, observed that “the company is racing against time for technology breakthroughs and commercialisation before burning through cash.”
Geopolitics as a Business Model
Fueling this valuation is not current profitability, but a strategic imperative from Beijing. Investors are effectively buying a policy hedge, banking on the government’s determination to insulate its tech sector from Western influence.
Wang Yapei, a fund manager at Zijie Private Fund, suggested that “it’s the kind of froth welcomed by policymakers who hope tech firms can plough long-term money into research and development.”
In October 2023, the firm’s trajectory shifted irrevocably when it was placed on the U.S. Entity List. This designation cut Moore Threads off from advanced manufacturing nodes at TSMC, specifically the 7nm and 5nm EUV processes required for top-tier GPU performance.
Rather than collapsing, the firm pivoted to become a central pillar of China’s “sovereign AI” infrastructure. Regulatory tailwinds have intensified this shift, most notably a ban on foreign AI chips in state-funded data centers.
This policy effectively clears the board of competitors like Nvidia and AMD for government contracts, creating a protected market for domestic champions.
Expediting the listing, authorities signaled explicit state backing for the trading debut, positioning the firm alongside Huawei as a primary beneficiary of the country’s localization drive.
Technical Reality: Chasing the RTX 4060
While the market capitalization suggests a tier-one competitor, the silicon tells a different story. The “China’s Nvidia” moniker is a marketing triumph that masks a significant technical gap between Moore Threads and its American rival.
Commercially, the firm relies on the MTT S4000 for data centers and the S80 series for consumer desktops. Fan Zhiyuan, an analyst at Sinolink Securities, pointed out that “the era of AI is driving rapid expansion in GPU demand.”
Independent performance data indicates the company is currently competing with Nvidia’s past, not its future. Leaked benchmarks from July revealed that the upcoming MTT S90 scored 420,000 points in the Ludashi test suite.
This result barely edges out Nvidia’s mid-range RTX 4060, which scored 400,000 points, placing the Chinese flagship firmly in the mid-tier category of the previous generation.
On the software front, the battle is equally critical. Moore Threads is attempting to establish its “MUSA” architecture as a viable alternative to Nvidia’s entrenched CUDA standard.
A significant validation came recently with confirmed support for the “UE8M0 FP8 scale” format used by DeepSeek’s AI models, a move that integrates the hardware into one of China’s most important LLM ecosystems.
Nevertheless, analysts cited by Reuters remain concerned by the widening disparity between the company’s market capitalization and its current technical output. Contextualizing this premium requires looking at the broader market: China’s SSE STAR Chip index is currently trading at a lofty 118 times earnings, a figure that dwarfs the Shanghai Composite Index’s multiple of just 12.
Moore Threads is testing the upper limits of even this inflated sentiment. The IPO was priced at 123 times its 2024 sales, a valuation that relies heavily on future execution rather than present results. To support this price tag, the company has issued aggressive guidance, projecting that 2025 sales will surge by as much as 242% to reach 1.5 billion yuan.
The ‘Four Dragons’ and the Road Ahead
Moore Threads is merely the first of the so-called “Four Dragons” of Chinese GPU startups to test the public markets. Its performance will likely set the tempo for peers like Enflame and Biren, both of which have initiated pre-IPO “tutoring” processes. MetaX, another key player, filed for its own listing in June 2025.
Looming over all these startups is Huawei. The unlisted telecommunications giant possesses a far deeper R&D budget and supply chain integration. Its Ascend 910C chip is widely regarded as the most capable domestic alternative to Nvidia’s H100, particularly as stricter US export controls continue to tighten the noose around foreign hardware.
Manufacturing bottlenecks pose an existential threat to the entire cohort. Without access to TSMC, Moore Threads must rely on domestic foundries like SMIC. These facilities are already constrained by low yields and high demand from Huawei, raising questions about whether Moore Threads can secure enough capacity to mass-produce the “new-generation” chips promised in its prospectus.
Once the initial lock-up periods expire and the retail euphoria subsides, the company will face the pressure of delivering quarterly results that justify a $7.5 billion valuation while navigating the most hostile semiconductor trade environment in history.
