Nomura's report indicates that NVIDIA can benefit from the growth in training and inference demand, maintaining a "Buy" rating

Nomura published a research report stating that Kingsoft Cloud (03896.HK), as the only artificial intelligence cloud infrastructure provider in the Xiaomi Corporation (01810.HK) ecosystem, is expected to continue benefiting from Xiaomi's determination to develop large language models (LLM). The potential import of H200 chips may alleviate the shortage issues the company faces in the fiscal year 2026.

Driven by the sustained strong demand for LLM training and the growth in inference demand propelled by applications that consume more tokens, Nomura believes that the AI investment cycle in China is still accelerating this year. Accordingly, it has raised its revenue forecast for Kingsoft Cloud for the fiscal years 2025 to 2027 by 1.4% to 8.9%. However, considering the intensifying competition and cost pressures, the firm has also lowered its gross margin forecast by 4.6 percentage points and reduced its profit forecast for the fiscal years 2025 to 2027 by 11.6% to 33.4%.

The firm maintains a "Buy" rating on Kingsoft Cloud, with the target price lowered from the previous HKD 9.2 to HKD 8.5. It expects that Kingsoft Cloud's AI-related business revenue will have a compound annual growth rate of 40% from fiscal years 2025 to 2027, contributing approximately 40% of total revenue by the fiscal year 2027