10 Best Performing Chinese Stocks So Far in 2025

3. Kingsoft Cloud Holdings Limited (NASDAQ:KC)

No. of Hedge Fund Holders: 12

YTD Returns: 83.33%

Kingsoft Cloud Holdings Limited (NASDAQ:KC) is focused on providing cloud services to businesses and organizations primarily in China. The growing demand for AI and cloud-based solutions continues to accelerate Kingsoft’s expansion. The company massively benefits from the integration with Xiaomi’s IoT, cellphones, and electric cars. Xiaomi, a company also chaired by KC’s chairman Lei Jun, poached DeepSeek developer Luo Fuli to join Xiaomi’s Artificial Intelligence development team. This news has attracted investors’ attention as the shares continue to surge.

Xiaomi’s strategic plan to integrate AI into its ecosystem favourably placed Kingsoft as a major partner. Xiaomi’s AI development plan will also create a ripple effect on Kingsoft Cloud Holdings Limited’s (NASDAQ:KC) cloud computing business. The company has already demonstrated strong growth in its AI business, which accounted for almost 31% of public cloud revenue in Q3 2024. The company’s strategic collaboration with Xiaomi and other major players positions it to take advantage of the AI saga.

Analysts at UBS are optimistic about Kingsoft’s ability to capitalize on growth opportunities in the cloud service sector, especially in China. They raised the rating on KC shares from Neutral to Buy, citing a positive revenue outlook and margin recovery as key growth drivers.