The stock reached 54.65 yuan mid-session compared to its sale price of 8.66 yuan per share

Shares of CXMT Corp surged more than 500% on ​their Shanghai trading debut on Monday following Asia’s biggest IPO this year, catapulting the chipmaker to the top of China’s stock market by valuation despite ‌a recent selloff in world tech stocks.

The stock reached 54.65 yuan mid-session compared to its sale price of 8.66 yuan per share. The rally lifted CXMT’s market capitalisation to 3.65 trillion yuan ($539.21 billion), sharply up from $85.5 billion during the IPO process.

The explosive debut makes CXMT the most valuable company listed in China, overtaking Industrial and Commercial Bank of China (ICBC), the market’s previous heavyweight.

CXMT’s first-day rally ​easily outstripped the more-than-doubling recorded by China Resources New Energy after its $3.6 billion IPO in China earlier this month.

The strong debut provides ⁠a gauge of how much investors are willing to pay for a marquee Chinese chip firm, as markets navigate volatility following an AI-led selloff.

There was 122 billion yuan worth of ​CXMT shares traded in Shanghai during the morning session. CXMT became the first A-share stock to exceed 100 billion yuan turnover in a day, according to media reports.

Chinese chipmaking and ​semiconductor stocks dropped on Monday, as fund managers repositioned for CXMT shares.

CXMT’s astronomical rally has also sparked concerns of a bubble. Its expanding dominance in China has enabled it to raise prices for tech customers such as Huawei.

At such a price, I don’t dare to hold, or buy the stock, said Wu Zhou, fund manager at Shenzhen Deyuan Investment, who bought ​CXMT’s IPO shares, adding he sold them all when the stock began trading.

AI-linked stocks, including chipmakers, have been at the forefront of world equity market gains this year. But concerns ​about stretched valuations and whether hefty AI-related capital expenditures will generate earnings growth quickly enough have recently dampened investor enthusiasm.

The (CXMT) stock is too expensive and smells of speculation, said Yuan Yuwei, hedge fund ‌manager at Trinity ⁠Synergy Investments, adding that it’s hard to say the optimism is sustainable.

Only 6.73% of CXMT’s enlarged share capital was freely tradable at listing, as most shares are locked up. The small initial float could magnify price swings and attract strong turnover.