Analysts sharply raised the target price of Zhipu's stock: a 72% increase and a paradigm shift in Chinese AI.
A major investment bank has revised its view on Chinese AI developer Zhipu, raising its target stock price by nearly 72%. The market reacted instantly: the company's shares on the Hong Kong Stock Exchange soared by more than 37%, extending an impressive five-day winning streak. This is not just a forecast adjustment—it is a signal of a fundamental shift in how investors value China's artificial intelligence sector.
From price war to intellectual monetization
Analysts led by Gary Yu raised the target price for Zhipu from HKD 990 to HKD 1,700. Key drivers of the revision include expanded access to computing resources needed for training and deploying models, as well as the successful completion of another funding round. However, the core thesis runs deeper: the previous logic, which held that competition among numerous open models would lead to their consolidation and a price collapse, no longer applies.
"China's large AI model industry is forming healthier commercialization," Yu emphasizes. The sector is transitioning "from price competition to monetization through model intelligence." Revenue now comes not from the cheapest model, but from the smartest one. If this trend takes hold, investors will have to completely rethink how they value the entire industry.
Zhipu on the rise, MiniMax cautious
Zhipu, founded in 2019 and known for its GLM series of large language models, has already raised $4 billion in a follow-on share placement in Hong Kong this year. In contrast, analysts maintained a "constructive" outlook for MiniMax but lowered its target price to HKD 900, expecting the strongest growth in later stages rather than the near term. Meanwhile, MiniMax shares rose 4.8% on the day, and Alibaba's stock received a positive assessment thanks to advantages in computing power and growth in its cloud business margins.
The Hang Seng Index opened up 0.53%, while the Hang Seng Tech Index rose 0.85%. Zhipu's five-day rally is a clear market bet that the forecast of a shift toward intellectual monetization will prove correct.
My view: This is a landmark moment. If Chinese AI companies previously competed for market share through price dumping, investors are now beginning to distinguish leaders by model quality and their ability to convert that into stable revenue. Zhipu, with its strong scientific foundation and access to resources, looks like the main beneficiary of this new paradigm. However, the caution on MiniMax serves as a reminder: the race is just beginning, and not everyone will emerge victorious.