The AI market in China is changing the paradigm: Zhipu surges 37% after target price revision
An analytical revision of the target stock price for Chinese AI startup Zhipu has triggered an impressive rally: the company's shares surged more than 37%, extending a five-day winning streak. This is not just a forecast adjustment, but a signal of a fundamental shift in the valuation of the entire artificial intelligence sector in China.
In my market analysis, I see that raising the target price from 990 to 1,700 Hong Kong dollars (HKD) is not a speculative move, but rather recognition of two key factors: expanded access to computing resources for training and launching models, as well as the successful completion of another funding round. These factors create a solid foundation for long-term growth.
From price war to monetization of intelligence
Just a few months ago, the dominant narrative in the market was the threat of unification of open-source models and price collapse due to intense competition. However, it is now clear that this logic is outdated. China's large language model industry is forming a healthier commercial model, where the winner is not the cheapest model, but the most intelligent one.
This is also confirmed by the dynamics of other players. MiniMax, which received a "constructive" outlook but with a lowered target price to 900 HKD, showed a daily gain of 4.8%. Analysts expect its main potential to unfold in later stages, rather than in the near term. Alibaba also received a positive assessment thanks to its capabilities in end-to-end AI, its advantage in computing power, and the growth of its cloud business margins.
Market indices responded accordingly: the Hang Seng opened up 0.53%, while the Hang Seng Tech rose 0.85%. This confirms that investors are beginning to rethink their strategies regarding the entire Chinese technology sector.
Expert perspective
From my professional point of view, the transition from price competition to monetization of intelligence is an inevitable stage in the evolution of any mature technology market. Zhipu, founded in 2019 and known for its GLM model series, has already raised $4 billion in a secondary share placement in Hong Kong this year. If this trend takes hold, investors will have to fundamentally reassess the entire industry, betting on companies capable of turning AI models into stable revenue. Zhipu's five-day stock rally is just the first signal that the market is already making that bet.