Zhipu on investors' radar: target price soared 72%, shares gained 37%
China's artificial intelligence sector is undergoing a tectonic shift. A leading investment bank has revised its view on one of the key players—startup Zhipu—raising its target share price by nearly 72%. The market reacted instantly, extending a five-day rally: the company's market capitalization has grown by more than 37%. This is not just a correction of numbers, but a signal of a paradigm shift across the entire industry.
Changing Course: From Price War to Intellectual Monetization
My analysis of the situation shows that we are witnessing a fundamental turning point. Until recently, the dominant narrative was a race to lower model costs, which threatened to commoditize and devalue technology. However, the strategy is now shifting: competition is moving from the "who is cheaper" arena to the "who is smarter" arena. Revenue will come not from the most budget-friendly model, but from the most efficient and intellectually advanced one.
As part of this revision, the target price for Zhipu shares on the Hong Kong Stock Exchange has been raised from 990 to 1700 Hong Kong dollars (HKD). Key drivers of this valuation include expanded access to computing resources—a critically important asset for training and deploying models—as well as the successful completion of another funding round. This strengthens the company's position and gives it fuel for further momentum.
The Market Bets on Leaders of 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. Now, judging by the dynamics of quotes, the market is betting that precisely such companies—capable of converting AI developments into a stable cash flow—will become the main beneficiaries of the next wave of growth.
Notably, in the same report, analysts showed caution toward another AI company—MiniMax. Despite a "constructive" outlook, its target price was lowered to 900 HKD, indicating expectations of a later growth stage. Meanwhile, MiniMax shares rose 4.8% during the day, and Alibaba's stock also received a positive assessment thanks to strong positions in end-to-end AI, an advantage in computing power, and growth in cloud business margins. The overall market sentiment is confirmed by index dynamics: the Hang Seng opened up 0.53%, while the Hang Seng Tech rose 0.85%.
My verdict: The five-week rally in Zhipu shares is just the first signal. If the AI monetization forecast proves correct, we can expect a large-scale revaluation of the entire sector. Investors should closely watch companies that not only create models but also know how to turn them into sustainable profits. This is the new market reality, and those who adapt first will come out ahead.