Kingsoft Cloud (03896.HK) Hot Stock Analysis: Growth Driven by AI Boom, Significant Upside in Institutional Target Prices

Kingsoft Cloud (03896.HK) has recently emerged as a hot spot in the Hong Kong stock market, mainly driven by expectations of growing cloud service demand brought by the artificial intelligence wave. The in-depth ecological synergy between the company and Xiaomi as well as Kingsoft Corporation, combined with its better-than-expected performance in Q3 2025, together form the core drivers for its share price growth. As of the close on January 7, 2026, the company’s share price stood at HK$5.57, with a market capitalization of approximately HK$25.2 billion [0].

Kingsoft Cloud’s Q3 2025 financial report shows that the company achieved total revenue of RMB2.478 billion, a year-on-year increase of 31.4%, demonstrating strong growth momentum [4]. More importantly, AI cloud business revenue surged 116% year-on-year, accounting for 32% of total revenue, indicating that the company is successfully seizing the business opportunities brought by the AI wave. Public cloud service revenue also performed impressively, with a year-on-year increase of 49.1% [4]. In terms of profitability, quarterly losses narrowed significantly to RMB4.62 million, a substantial improvement compared to RMB1.057 billion in the same period last year, reflecting the continuous improvement of the company’s operational efficiency and the gradual emergence of economies of scale.

Recently, several renowned institutions have raised Kingsoft Cloud’s target price, showing professional investors’ optimistic outlook on the company’s prospects. CLSA raised its US-listed target price to US$20.5 and gave an “Outperform” rating, pointing out that breakthroughs by DeepSeek will accelerate the creation of Chinese AI applications and drive demand for cloud computing, and Kingsoft Cloud is expected to benefit from its strategic partnerships with Xiaomi and Kingsoft Corporation [1]. CICC raised its US-listed target price to US$20 and maintained an “Outperform Industry” rating; Goldman Sachs raised its target price to US$13.7-US$13.8; JPMorgan significantly raised its Hong Kong-listed target price from HK$2.2 to HK$10 and gave an “Overweight” rating [1][2]. UBS also stated that the market has underestimated the potential development opportunities of Kingsoft Cloud’s AI business [3].

The 2025-2027 framework agreement signed between Kingsoft Cloud and Xiaomi Group shows that the upper limit of connected transactions has been increased to RMB4.035 billion [3], which provides Kingsoft Cloud with a stable revenue source and growth certainty. Against the backdrop of the current AI infrastructure investment boom, the deep integration with Xiaomi enables Kingsoft Cloud to obtain continuous business demand and reduce the uncertainty of market development.

The investment value of Kingsoft Cloud needs to be interpreted in depth from multiple dimensions. First, the company is in a critical stage of transformation from traditional cloud services to AI cloud services. The proportion of AI cloud business revenue has rapidly increased from 0 to 32%, and this structural change may reshape the company’s valuation logic. Second, although connected transactions with Xiaomi provide revenue certainty, they also bring exposure to the risk of high customer concentration, and investors need to continuously monitor the changing trend of this dependency.

From a market pricing perspective, despite the significant upward revisions of target prices by multiple institutions, the current share price (approximately HK$5.57) still has nearly 80% potential upside compared to JPMorgan’s target price of HK$10. However, the achievement of this target price depends on the actual implementation progress of the AI business and the continuous improvement of profitability. It is worth noting that CLSA’s target price of US$20.5 (equivalent to approximately HK$159 based on the current exchange rate) is vastly different from the current Hong Kong share price, which may reflect differences in valuation systems across different markets. Investors should treat comparisons of target prices under different calibers with caution.

: The current share price is still far from the 52-week high of HK$11.40, but the cumulative increase in the recent period is relatively large, and the market may have partially reflected optimistic expectations [0]. The company’s current P/S (price-to-sales ratio) is approximately 2.2 times, which is at a relatively high level in the cloud computing industry [0].

: Although the loss has narrowed significantly, the company remains in a loss-making state, and its profitability needs further verification [0]. Against the backdrop of continuous growth in AI infrastructure investment, the company may need to continue to invest a large amount of capital expenditure, which puts pressure on free cash flow and the profitability timeline.

: The cloud computing market is highly competitive, with giants such as Alibaba Cloud and Tencent Cloud dominating, and Kingsoft Cloud faces strong competitive pressure. In addition, uncertainties in Sino-US relations may affect the access to key equipment such as chips, posing potential constraints on the company’s AI infrastructure construction.

: The MACD indicator shows a death cross, indicating a short-term bearish signal; the 20-day moving average (HK$5.83) and 50-day moving average (HK$6.10) both suppress the share price, and the share price is in a sideways consolidation phase [0]. The Beta coefficient is as high as 2.02, meaning the share price has high volatility [0].

: Breakthroughs in AI models such as DeepSeek are accelerating the popularization of Chinese AI applications, which will directly drive the growth of demand for cloud computing resources. As an important domestic cloud service provider, Kingsoft Cloud is expected to fully benefit from this structural trend.

: With Xiaomi’s continuous investment in the AIoT and smart terminal fields, Kingsoft Cloud is expected to receive more business demand from the Xiaomi ecosystem. The increase in the upper limit of connected transactions reflects the optimistic expectations of both parties for the cooperation prospects.

: The rapid increase in the proportion of AI cloud business indicates that the company is successfully transforming, and the expansion of high-growth businesses is expected to improve overall profitability and valuation levels.

Kingsoft Cloud (03896.HK) is currently trading at approximately HK$5.57, with a 52-week trading range of HK$1.12-HK$11.40 and an average daily trading volume of approximately 101 million shares [0]. The company’s Q3 2025 revenue increased 31.4% year-on-year to RMB2.478 billion, and AI cloud business revenue increased 116% year-on-year [4]. Multiple institutions have given “Buy” or “Overweight” ratings, with target prices ranging from HK$10 (JPMorgan) to US$20.5 (CLSA) [1][2][3]. Technically, the share price is in a sideways consolidation phase, with a reference trading range of HK$5.47-HK$5.83. The MACD death cross indicates short-term pressure, while the KDJ golden cross provides some support [0]. Investors should pay attention to the performance of the short-term support level around HK$5.47 and the resistance level at HK$5.83.

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This report is based on integrated analysis of multi-source information. Technical indicators and price data are sourced from the Jinling Analysis Database [0], Gelonghui reports provide information on institutional target price hikes [1], Moomoo data provides analyst rating statistics [2], Bank Joint Information Network analyzes the business synergy between Kingsoft Cloud and Xiaomi Group [3], AASTOCKS provides details of Q3 results [4], Yahoo Finance provides historical price data [5], and Moomoo analyzes the company’s stock issuance plan [6]. The credibility of each information source has been evaluated and verified based on official disclosures, mainstream financial media, and authoritative data platforms.