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Investing.com - BofA Securities upgraded Kingsoft Cloud Holdings (HK:3896) from Neutral to Buy and raised its price target to HK$10.60 from HK$6.70, citing improved revenue growth visibility driven by artificial intelligence.
The upgrade follows Kingsoft Cloud’s second-quarter 2025 results released in late August, which exceeded consensus revenue expectations by 3%, according to BofA Securities.
The firm highlighted three key factors supporting its more positive outlook: higher revenue growth visibility driven by AI and incremental demand from the Xiaomi ecosystem, improving business quality as AI-driven public cloud business delivers higher gross profit margins, and improving profitability through operating leverage and cost control.
BofA Securities raised its FY25-27E revenue estimates for Kingsoft Cloud by 6-8%, positioning its forecast 2-5% above consensus estimates, and expects the company to reach non-GAAP operating-level breakeven in fiscal year 2027.
The new price target represents a valuation of 3x 12-month forward price-to-sales ratio, up from the previous 2x multiple, reflecting the firm’s more optimistic growth outlook for Kingsoft’s AI-driven public cloud services.
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