The market is reassessing Chinese AI: Zhipu's target price surged 72%, shares rose 37%
A major investment bank raised its target price for shares of Chinese AI startup Zhipu by nearly 72%, triggering a powerful rally in the Hong Kong market. The company's stock continued a five-week climb, gaining more than 37%. This is a signal of a fundamental shift in the valuation of China's entire artificial intelligence sector.
In my analytical review, I note the revision of Zhipu's projected value from 990 to 1,700 Hong Kong dollars (HKD) per share. Key drivers include expanded access to computing resources for training and deploying models, as well as the successful completion of another funding round. This is not just a targeted adjustment, but a paradigm shift in how China's AI industry is perceived.
From price war to monetizing intelligence
Just a few months ago, the dominant narrative was competition among numerous open-source models, which was expected to lead to consolidation and a collapse in prices. That logic is now outdated. China's large model industry is forming a healthier commercial model, where revenue comes not from the cheapest model, but the smartest one. The sector is transitioning from price competition to monetization driven by model intelligence.
Zhipu, founded in 2019 and known for its GLM series of large language models, has already raised $4 billion this year through a secondary share placement in Hong Kong. This confirms strong investor interest in the project amid the overall narrowing of the gap between Chinese and Western AI developments.
Caution regarding MiniMax
In the same analytical report, the bank maintained a "constructive" outlook on MiniMax but lowered its target price to 900 HKD, expecting the greatest growth at later stages. Meanwhile, MiniMax shares rose 4.8% during the day, and Alibaba's stock received a positive assessment thanks to its strong position in end-to-end AI, advantages in computing power, and growth in cloud business margins.
The Hang Seng Index opened up 0.53%, while the Hang Seng Tech Index rose 0.85%. Zhipu's five-week stock rally shows that the market is already betting on this scenario.
My conclusion: If the monetization trend takes hold, investors will have to reassess the entire industry. Companies capable of turning AI models into steady revenue could see sharp increases in value, and we are only witnessing the beginning of this process.