China’s AI IPOs Fail To Lift A Slumping Stock Market

The much-anticipated IPOs of two Chinese AI-related companies this week have not been enough to save the country's stock markets from their worst month in a decade. The CSI 300 Index had its biggest monthly decline since January 2016, falling 9.6% in July reported the Financial Times while the tech-heavy STAR 50 Index has fallen 30% from its mid-July peak according to Caixin Global.

Just days after ChangXin Memory Technologies' (CXMT) soared 466% above its IPO price, Zhongji Innolight's share price fell 5% during its IPO. CXMT is the world's fourth largest DRAM supplier while Zhongji Innolight supplies components used in AI data centers, cloud computing, high-speed networking and is the world's largest provider of optical interconnect solutions by revenue, according to the company's prospectus.

The IPOs suffered from bad timing, coming amidst a global AI-driven selloff that hammered chipmakers just as weakness in Chinese equities prompted another round of state support measures. Chinese state-owned entities known as the "national team" bought $9 billion worth of stock, Wall Street Journal reported, while Bloomberg noted simultaneous stock buybacks by Chinese companies at levels not seen since U.S. President Donald Trump announced heavy tariffs in April 2025.

Aggressive state interventions and AI IPOs were not enough to stem the downward slide. The combined market capitalization of Zhongji Innolight, Eoptolink and Cambricon Technologies fell by more than $50 billion on Thursday alone, while Tencent and Alibaba have dropped 21.5%, and 21.8%, respectively, this year.

The contraction of China's stock markets mirrors a broader global pullback. Weak earnings from major technology companies intensified concerns about AI-related capital spending, with chipmakers Nvidia down 4%, and Micron down more than 10% on Wednesday, and South Korea's KOSPI Index closing on Thursday 40% below its record high thanks to Samsung's, and SK Hynix's dramatic fall.