Jefferies Trims Kingsoft Cloud (KC) Price Target, Keeps Buy Rating
Jefferies analyst Thomas Chong lowered the price target for Kingsoft Cloud Holdings Ltd (NASDAQ:KC) to $16 from $18 on May 28 and maintained a Buy rating. The adjustment came only hours after the company’s Q1 2025 results were released.
A computer engineer seated in front of several connected consoles, illustrating the depth of cloud services offered by the company.
Kingsoft Cloud’s quarterly revenue reached RMB1,970.0 million ($271.5 million), a 10.9% increase year-over-year but an 11.7% decrease quarter-over-quarter. Management attributed the sequential decline to seasonal factors and timing issues related to product deliveries in the enterprise cloud segment.
But, despite the challenges, Tao Zou, the company’s CEO, is confident that the future of their cloud business is robust. He stated that “the importance for cloud services as infrastructure in the AI-era is gaining greater traction.” As such, the company is “fully committed into our AI related investment and high-quality and sustainable business development.”
Chong also touched on this aspect in his research note. He emphasized the strong demand for Kingsoft Cloud’s AI services despite trimming the price target. Notably, the company's gross billing of AI business increased by 228% year-over-year to RMB525 million ($72.975 million). He also noted that the Kingsoft Cloud’s new approach to leasing could potentially reduce gross profit margins but would also decrease reliance on cash reserves. With the current price target set at $16, Jefferies’ valuation reflects Kingsoft Cloud’s financial standing and evolving market conditions.
Kingsoft Cloud Holdings Limited (NASDAQ:KC) is a leading cloud service provider in China. The company offers products like infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and enterprise cloud services. These products incorporate advanced technologies such as AI, big data, IoT, and edge computing.
While we acknowledge the potential of Kingsoft Cloud Holdings Ltd (NASDAQ:KC) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than KC and that has 100x upside potential, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None.
Content Original Link:
" target="_blank">
