Market shifts priorities: analysts sharply raise Zhipu's target price, shares soar 37%
Revisions of estimates by leading investment banks continue to reshape the landscape of China's artificial intelligence market. The target price for Zhipu shares was raised by nearly 72%, triggering a powerful five-day rally: the company's stock gained more than 37%. This is not just a targeted adjustment—it is a signal of a fundamental shift in the valuation logic of the entire sector.
In the updated analytical report, the target price for Zhipu's Hong Kong-listed receipts was raised from 990 to 1,700 Hong Kong dollars (HKD). Key drivers of the revision were expanded access to computing resources—a critically important asset for training and deploying models—as well as the successful completion of another funding round that strengthened the company's balance sheet.
From price war to battle for intelligence
Just a few months ago, the dominant narrative in the market was the threat of a "race to the bottom": competition among numerous open models was expected to lead to their commoditization and a collapse in prices. Now that logic has stopped working. China's large language model industry is forming a healthier commercial model, where the winner is not the cheapest but the smartest model.
The sector is shifting from competing on price to monetizing on model intelligence. If this trend takes hold, investors will have to completely rethink their approach to valuing assets in this industry. This is not about a temporary speculative wave, but a change in the very paradigm of value creation.
Context and related assets
Zhipu, founded in 2019 and known for its GLM series of models, has already raised $4 billion this year through a secondary share placement in Hong Kong. This provided the company with a significant "safety cushion" and resources for scaling.
In the same report, analysts maintained a "constructive" outlook on MiniMax but lowered the target price to 900 HKD, expecting the greatest growth at later stages. Meanwhile, MiniMax shares rose 4.8% during the day. Alibaba shares also received a positive assessment thanks to strong positions in end-to-end AI and growing margins in its cloud business. Against this backdrop, the Hang Seng Index opened up 0.53%, while Hang Seng Tech gained 0.85%.
My view: Zhipu's five-day rally is an early market bet that "intelligence" will become the main commodity in the AI industry. However, investors should remember: the transition from price competition to monetization is not a fast process, and volatility along the way will be high. The key indicator will be companies' ability to turn their models into sustainable cash flow, not just technological superiority.