Cambricon Q3 2026 Earnings: Profit Up 148%, Revenue Misses
Cambricon Technologies, the Chinese AI chip designer often called "China's Nvidia," doubled its revenue in its Q3 2026 earnings and still fell well short of what analysts expected. Its Q3 report, filed with the Shanghai Stock Exchange after the close on October 23, shows revenue of RMB 3.53 billion, up 104.47% year over year, and net profit attributable to shareholders of RMB 1.40 billion, up 147.74%. Analysts had expected about RMB 6.26 billion in revenue, according to Bloomberg, so sales came in roughly 44% below consensus.
Analysts read the gap as a supply problem. Cambricon's inventory more than doubled this year while operating cash flow turned negative for the quarter, which suggests the company is buying components and building chips faster than it can ship and bill them.
Key takeaways
- Q3 2026 revenue: RMB 3.53 billion (+104.47% YoY). Nine-month revenue: RMB 9.53 billion (+106.76%).
- Q3 net profit attributable to shareholders: RMB 1.40 billion (+147.74%). Excluding non-recurring items: RMB 1.36 billion (+168.13%).
- Bloomberg's consensus was about RMB 6.26 billion for the quarter; Bloomberg attributed the miss to manufacturing limits and memory shortages.
- Inventory reached RMB 11.66 billion on September 30, up from RMB 4.94 billion at the end of 2025. Q3 operating cash flow was minus RMB 83.68 million.
- Cambricon's 2026 employee incentive plan sets a revenue target of RMB 13.5 billion, which would need at least RMB 3.97 billion in Q4.
- The stock closed at RMB 932.20 on October 23, up 5.46%, before the results came out. Monday, October 26 is the first trading session after the report.
Cambricon Q3 2026 earnings at a glance
| Metric (RMB) | Q3 2026 | YoY | Jan to Sep 2026 | YoY |
|---|---|---|---|---|
| Revenue | 3.53B | +104.47% | 9.53B | +106.76% |
| Net profit attributable to shareholders | 1.40B | +147.74% | 3.71B | +131.49% |
| Net profit excl. non-recurring items | 1.36B | +168.13% | 3.52B | +148.30% |
| Operating cash flow | -83.68M | n/a | 227.64M | vs -29.30M |
| R&D spending | 522.59M | +73.66% | 1.23B | +45.35% |
| Basic EPS | 2.23 | +145.05% | 5.91 | +129.07% |
Source: Cambricon 2026 Q3 report (unaudited).
The report gives a short reason for the growth: market expansion and support for AI application deployment. It does not break revenue down by product or customer.
Margins
Cambricon does not print a quarterly gross margin, but it can be worked out from the filings. Nine-month cost of revenue was RMB 4.14 billion; subtracting the first-half figure from the 2026 interim report leaves about RMB 1.46 billion for Q3, which puts Q3 gross margin near 58.7%. For the first nine months the margin was about 56.5%, up from 55.3% a year earlier. These are our calculations from the reported figures.
R&D spending was 14.8% of Q3 revenue, down from 17.4% a year earlier. Spending is still rising quickly in absolute terms; revenue is rising faster.
Why revenue missed
Bloomberg's analysis, as summarized by The Next Web, points to two limits:
- Memory. AI accelerators need high-bandwidth memory (HBM), stacked DRAM placed next to the processor. HBM is made mainly by Samsung, SK hynix and Micron, and US export controls block sales of advanced HBM to China. Chinese suppliers such as CXMT are still ramping up.
- Manufacturing. Cambricon's chips are made in China, where SMIC cannot buy ASML's most advanced lithography tools. That limits how many advanced chips it can produce and at what yield.
Morgan Stanley, cited by the South China Morning Post, said rising HBM costs constrained shipments of Cambricon's MLU580, and that MLU692 units went to a large cloud customer for testing in Q3, with most related revenue expected in Q4.
The company itself has not attributed the shortfall to supply. Its filing reports the numbers without commenting on the consensus.
Inventory and cash flow tell the same story
The balance sheet is where the supply squeeze shows up most clearly.
| Balance sheet item (RMB) | Sep 30, 2026 | Dec 31, 2025 | Change |
|---|---|---|---|
| Inventory | 11.66B | 4.94B | +136% |
| Prepayments to suppliers | 3.04B | 0.74B | About 4.1x |
| Notes payable | 4.97B | 0.35B | About 14x |
| Contract liabilities (customer prepayments) | 141.24M | 0.61M | Up from near zero |
| Cash and bank balances | 555.38M | 1.32B | -58% |
| Total assets | 22.36B | 13.44B | +66% |
Source: Cambricon 2026 Q3 report.
Read together, these lines describe a company stocking up. Cambricon prepaid suppliers RMB 3.04 billion, paid for more purchases with notes, and held RMB 11.66 billion of inventory, which is more than its entire nine-month revenue. Some customers have also started paying in advance, as the jump in contract liabilities shows.
Two numbers deserve caution:
- Cash and bank balances fell to RMB 555 million, but Cambricon also held RMB 3.81 billion of trading financial assets (mainly short-term investments), so liquidity is not as thin as the cash line alone suggests.
- Asset impairment losses for the nine months were RMB 501.61 million, against RMB 86.94 million a year earlier. The filing does not say what was written down. With inventory this large, investors will look for that breakdown on the earnings call.
The RMB 13.5 billion target
Several reports say Cambricon "reiterated" a 2026 revenue target of RMB 13.5 billion. That number comes from the company's 2026 restricted stock incentive plan, published in July, where it is the performance target for employee share vesting (with a lower trigger of RMB 10.8 billion), according to a 10jqka summary of the plan. It is not formal earnings guidance, and the Q3 report does not repeat it.
The math is still useful. With RMB 9.53 billion booked through September, Cambricon would need at least RMB 3.97 billion in Q4 to reach RMB 13.5 billion. That is about 12.5% more than Q3 and roughly double the Q4 2025 level of about RMB 1.89 billion, based on 2025 full-year revenue of RMB 6.50 billion reported by NBD. If the MLU692 revenue Morgan Stanley expects lands in Q4, the target is within reach; if memory supply stays tight, it gets harder.
Where Cambricon sits in China's AI chip market
China's demand for domestic AI chips rose sharply in 2026 as Nvidia was pushed out. In January, Chinese customs officials told agents that Nvidia's H200 was not permitted to enter, Reuters reported. Nvidia's own Q2 fiscal 2027 CFO commentary said Hopper shipments to China were less than 1% of data center revenue and that its outlook assumes no data center compute revenue from China. Our earlier piece on China's draft AI export controls covers the policy from the other side.
Market share estimates vary depending on what is measured:
| Measure | Cambricon | Source |
|---|---|---|
| China data center AI accelerator shipments, H1 2026 | 5% (Nvidia 34%, Huawei 28%) | IDC via TechNode |
| China AI chip market share, 2026 estimate | About 14%, second to Huawei | Morgan Stanley via Bloomberg |
These figures measure different things (unit shipments in one half-year versus a full-year market estimate), so they should not be compared directly. Bloomberg also reported that Cambricon chips run models from DeepSeek and Moonshot AI, whose Kimi K3.1 Pro launched this week.
For comparison, Hygon, another Chinese processor maker, reported Q3 revenue of RMB 5.9 billion (+45.5%) and net profit of RMB 1.0 billion (+37.9%) the same week, according to SCMP.
How Cambricon compares with big-tech AI spending
Cambricon's results are the supply side of the same AI build-out that shows up as capex at US platforms. Meta, for example, expects $135 billion to $145 billion of capital spending this year, as covered in our Meta Q3 2026 earnings piece. Chinese cloud and internet companies are making similar bets with fewer chip options, which is why Cambricon's ability to secure memory and wafer capacity matters as much as its chip designs.
What to watch next
- October 26 trading: the first session after the report will show how the market weighs the profit growth against the revenue miss.
- Earnings call: investors will look for comments on HBM supply, the impairment breakdown, MLU692 shipments and customer concentration.
- Q4 revenue: at least RMB 3.97 billion is needed to meet the incentive-plan target.
- Memory supply: progress on domestic HBM from CXMT and others would ease the main bottleneck analysts point to.
This article explains reported results and is not investment advice.
FAQ
What were Cambricon's Q3 2026 results?
Cambricon reported Q3 2026 revenue of RMB 3.53 billion, up 104.47% year over year, and net profit attributable to shareholders of RMB 1.40 billion, up 147.74%. For the first nine months, revenue was RMB 9.53 billion and net profit RMB 3.71 billion. The figures are unaudited and come from the company's October 23 filing.
Why did Cambricon miss revenue estimates?
Bloomberg reported analysts expected about RMB 6.26 billion in Q3 revenue. Bloomberg linked the roughly 44% shortfall to manufacturing constraints and shortages of high-bandwidth memory. Cambricon's filing does not comment on the consensus or give a reason for the gap.
Why did Cambricon's inventory rise so much?
Inventory rose to RMB 11.66 billion at the end of September from RMB 4.94 billion at the end of 2025, while prepayments to suppliers rose to RMB 3.04 billion. That pattern is consistent with a company securing scarce components and building product ahead of shipments, although the filing does not explain the increase.
Is RMB 13.5 billion Cambricon's official 2026 guidance?
No. RMB 13.5 billion is the 2026 revenue target in Cambricon's restricted stock incentive plan, published in July 2026. Reaching it would require at least RMB 3.97 billion of revenue in the fourth quarter.
How big is Cambricon in China's AI chip market?
IDC data reported by Reuters put Cambricon at 5% of China's data center AI accelerator shipments in the first half of 2026, behind Nvidia (34%) and Huawei (28%). Morgan Stanley estimates a larger share, about 14%, for 2026 on a different basis.
Sources
- Cambricon: 2026 Q3 report (SSE filing, PDF)
- Cambricon: 2026 interim report (SSE filing text)
- Bloomberg: AI Chipmaker Cambricon's Sales Miss in Sign of Output Constraint
- The Next Web: Cambricon Q3 sales miss on chip supply
- South China Morning Post: Cambricon's third quarter profit surges 148%
- 10jqka: Cambricon Q3 results and share data
- 10jqka: Cambricon 2026 incentive plan targets
- TechNode: Nvidia's China AI chip share falls to 34% (IDC)
- NVIDIA: Q2 fiscal 2027 CFO commentary (SEC)
- Taipei Times (Reuters): China tells customs H200 not permitted
- NBD: Cambricon 2025 annual results
This article is for informational purposes only and is not investment advice. Do your own research before making investment decisions.