Kingsoft Software (03888) Analysis: AI & Cloud Growth Drives Performance Amid Data Center Demand

The event was reported on 2025-11-25 16:30 UTC+8 (Hong Kong time), with analysis current as of 2025-11-25 12:30 AM PST.

This analysis draws from internal reports [0] and external sources [1][2]. Kingsoft Software (03888) showed robust Q3 2025 performance: AI-related revenue rose ~120% to RMB7.82B, cloud revenue grew49.1% to RMB17.52B, and adjusted net profit turned positive at RMB2.87B. Analyst average target price of HK$41.52 offers ~45% upside. Data center-related stocks like Kingsoft (via Kingsoft Cloud), Tencent (00700), and Alibaba (09988) benefit from AI and cloud demand.

#2. Comprehensive Analysis

Kingsoft’s Q3 results highlight two key pillars: AI and cloud services [0]. AI revenue surged due to enterprise AI solutions and integration with WPS Office. Cloud revenue growth was fueled by data center expansion and AIoT demand from Xiaomi’s ecosystem. The company’s profit turnaround reflects operational efficiency gains.

Data center demand in HK is driven by AI and cloud adoption [0]. Key players include:

• 03888
  : Kingsoft Cloud provides data center and cloud services.
• 00302
  : Game company relying on data center infrastructure.
• 00777
  : Education and game business using data center applications.
• Tech Giants
  : 00700 (Tencent),09988 (Alibaba),03690 (Meituan) are major data center users.

#3. Key Insights

• AI-Cloud-Data Center Link
  : AI growth directly boosts cloud service demand, which in turn drives data center expansion [0].
• Ecosystem Advantage
  : Kingsoft Cloud’s exclusive partnership with Xiaomi’s AIoT ecosystem creates a competitive moat [0].
• Analyst Confidence
  : The ~45% upside from current price to average target indicates strong market optimism [1].

#4. Risks & Opportunities

• AI Expansion
  : Growing enterprise AI adoption will continue to drive revenue [0].
• Data Center Demand
  : Cloud service growth supports long-term data center needs [0].

• Market Volatility
  : HK stocks are sensitive to global market shifts and policy changes [0].
• Valuation Concerns
  : Some tech stocks may face corrections due to high valuations [2].
• Competition
  : Rapid tech evolution requires continuous innovation to stay ahead [0].

#5. Key Information Summary
Kingsoft Software (03888) is a leading player in AI, cloud, and data center-related services in HK. Its strong Q3 results and analyst upside target make it a key watch in the tech sector. Data center-related stocks are well-positioned to benefit from AI and cloud growth, though investors should monitor risks like market volatility.