Zhipu's target price soared 72%: China's AI sector shifts from price wars to a battle for intelligence
Analysts at one of the world's leading investment banks have radically revised their view on Chinese AI developer Zhipu, raising its stock price target by nearly 72%. The market reacted instantly: the company's shares on the Hong Kong Stock Exchange surged more than 37%, extending an impressive five-day winning streak. This is not just a targeted update—it is a signal of a paradigm shift across China's entire artificial intelligence industry.
The expert team, led by chief analyst Gary Yu, raised Zhipu's price target from 990 to 1,700 Hong Kong dollars (HKD). Key drivers of the revision include expanded access to computing resources, critical for training and deploying models, as well as the successful completion of another funding round. But the main factor is a shift in the market's underlying logic itself.
From a Price War to Monetizing Intelligence
Just a few months ago, the dominant scenario for China's AI sector was intense competition among numerous open-source models, which would inevitably lead to their commoditization and a price collapse. Now that thesis is outdated. The bank states outright: "China's large model industry is forming healthier commercialization."
The sector is moving from price competition to monetization driven by model intelligence. Revenue now comes not from the cheapest model, but the smartest one. If this trend takes hold, investors will have to completely rethink how they value the entire industry.
Context and Market Bets
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 offering in Hong Kong. Throughout 2026, Chinese AI models have steadily narrowed the gap with their Western counterparts, and analysts now forecast a global revaluation of Hong Kong tech assets amid the AI boom.
The report also mentions other players. For MiniMax, a "constructive" outlook was maintained, but the price target was cut to 900 HKD—experts expect the company's biggest growth in later stages, not in the near term. MiniMax shares rose 4.8% on the day. Alibaba also received a positive assessment: analysts highlighted its end-to-end AI capabilities, advantage in computing power, and growing cloud business margins.
The broader backdrop is also positive: the Hang Seng Index opened up 0.53%, while the Hang Seng Tech Index rose 0.85%.
Zhipu's five-day stock rally is not just a speculative reaction. The market is already betting that companies capable of turning AI models into steady revenue will command a significant premium. In my analysis, if the monetization forecast holds, we will witness not just a rise in individual stocks, but a fundamental revaluation of the entire Chinese tech sector. Investors should closely watch companies' ability to convert intellectual developments into real profits—this will be the key differentiator in the new phase of the market.