**Zhipu: target price soared 72%, stock +37% — AI market shifts from price wars to intelligence**
China's artificial intelligence sector is undergoing a tectonic shift, and investors have already begun reallocating capital in line with the new paradigm. Amid revised forecasts for Zhipu's shares, one of China's leading AI startups, the company's stock has shown impressive growth, confirming that the market is willing to pay for intelligence, not cheapness.
My analysis shows that the nearly 72% increase in the target price—from 990 to 1,700 Hong Kong dollars (HKD)—is not just a numerical adjustment. It is a signal of a fundamental revaluation of the entire industry. The reasons for this optimism are clear: expanded access to computing resources for training and deploying models, as well as the successful completion of another funding round. 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 placement in Hong Kong.
From price race to monetizing intelligence
Just a few months ago, the dominant narrative was the threat of a "race to the bottom": competition among numerous open-source models was expected to lead to their homogenization and a collapse in prices. However, the logic has shifted. The industry is moving from price competition to monetization driven by model intelligence. Now, revenue comes not from the cheapest model, but from the smartest one. The large AI model industry is forming healthier commercialization.
This is also confirmed by market dynamics. Zhipu's five-day rally, during which the company gained more than 37%, is not a speculative spike but a deliberate bet on those capable of turning AI models into steady income. The Hang Seng Index opened up 0.53%, while the Hang Seng Tech Index rose 0.85%, indicating broad positive sentiment in the sector.
Caution in the details: MiniMax and Alibaba
However, the revaluation is not universal. According to my data, the bank maintained a "constructive" outlook on MiniMax but cut its target price to 900 HKD, expecting the strongest growth at later stages. Meanwhile, MiniMax shares rose 4.8% on the day. Alibaba also received a positive assessment thanks to its capabilities in end-to-end AI, advantages in computing power, and growth in cloud business margins.
If the monetization forecast proves correct, companies capable of converting AI models into sustainable profits will sharply increase in value. Zhipu's five-day rise is just the first signal. Investors will have to reassess the entire industry, favoring not scale but the quality of intelligence and the ability to capitalize on it. The market has already made its bet, and it appears to be the right one.