Morgan Stanley Upgrades Kingsoft Cloud, Citing Strong AI Transition

Kingsoft Cloud is repositioning itself as an AI‑focused cloud provider — a shift that should propel its shares upward, according to Morgan Stanley. The investment bank initiated coverage with an overweight rating and set a $15 price target, implying a 64% upside from Monday’s close. “We appreciate Kingsoft Cloud’s early and decisive transition from a mid‑tier commodity cloud operator to an AI‑centric platform, driven by accelerating AI revenue and improving profitability, bolstered by strong ecosystem support from Xiaomi and the broader Kingsoft Group,” analyst Yang Liu noted in a client memo. “KC’s timely pivot and aggressive AI strategy place it well among China’s leading public cloud providers.” The company has demonstrated robust pricing power despite a global chip shortage that has strained other AI firms, positioning it to continue delivering share upside. Kingsoft Cloud also stands to gain from strategic partnerships with major AI players, including its role as the core infrastructure provider for Xiaomi’s AI ecosystem and smart‑home platforms, as reported by the bank. Additionally, revenue growth from several key customers is expected to translate into further share gains, the analyst added. With solid cash flow, Kingsoft Cloud should ease balance‑sheet pressures, keeping its stock price elevated, Liu wrote. Morgan Stanley’s recommendation aligns with the broader Street consensus, as all 11 analysts covering the stock maintain a buy or strong‑buy stance, according to LSEG data. Although the shares have declined roughly 12% year‑to‑date, they rose 3% in premarket trading following the bullish call.

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