Morgan Stanley radically revises its assessment of Zhipu: +72% to target, shares soared 37%
A major reassessment of China's artificial intelligence sector took place this week. Analysts at a leading investment bank raised the target price for AI startup Zhipu by nearly 72%, triggering a powerful rally in the company's shares. Quotes soared by more than 37%, extending an impressive five-day winning streak. The key takeaway from the new report is that the market is finally moving away from the price war model in favor of monetizing intelligent products.
A New Era: From Dumping to Intellectual Rent
The target price for Zhipu shares on the Hong Kong Stock Exchange was raised from 990 to 1700 Hong Kong dollars (HKD). This significant upside is justified by two fundamental factors: expanded access to computing resources for training and launching models, as well as the successful closing of a new funding round. This removes key operational risks that previously weighed on the valuation.
Just a few months ago, the dominant narrative was competition among numerous open models, which would inevitably lead to their consolidation and a price collapse. Now that logic is outdated. The sector is demonstrating a shift from competing on price to monetizing through the quality of intelligence. Revenue goes not to the cheapest, but to the smartest model. This is a fundamental shift that requires a complete revaluation of the entire industry.
Market Context: MiniMax and Alibaba
In the same report, the bank also mentioned other players. For MiniMax, a "constructive" outlook was maintained, but the target price was lowered to 900 HKD. Analysts expect the company's greatest growth in later stages, rather than in the near term. MiniMax shares gained 4.8% during the day.
Alibaba also received a positive assessment thanks to advantages in end-to-end AI, computing power, and growth in cloud business margins. Against this backdrop, the Hang Seng Index opened up 0.53%, while Hang Seng Tech rose 0.85%.
My view: This revision is a signal that investors are beginning to distinguish companies capable of converting AI models into sustainable cash flow. Zhipu's five-day rise is just the beginning. If the monetization trend takes hold, we can expect a new wave of revaluation across the entire Chinese tech sector. The only question is who can maintain intellectual leadership.