Morgan Stanley raised its price target on Chinese AI firm Zhipu from HK$990 to HK$1,700, a jump of nearly 72%. The bank cited better access to computing power and the completion of a new financing round. Zhipu's shares have climbed 37% in five days.
Why the target jumped
Analyst Gary Yu said China's AI industry is shifting from price competition to monetization driven by model intelligence. That shift, plus Zhipu's improved computing resources and fresh capital, supports the higher valuation. The new target implies the bank sees room for the stock to keep climbing after its recent surge.
Zhipu's momentum
Zhipu was founded in 2019 and is known for its GLM series of large language models. Earlier this year it raised $4 billion in a Hong Kong share offering. That cash, combined with the computing power access, appears to be what Morgan Stanley is betting on. The stock's 37% run over five days suggests investors are paying attention.
Wider AI re-rating
Zhipu isn't the only name in the mix. Morgan Stanley lowered MiniMax's target to HK$900 but stayed constructive on the stock, which rose 4.8%. The bank also gave a bullish mention to Alibaba, pointing to end-to-end AI capabilities, computing power advantages, and expanding cloud margins. Hong Kong's tech indexes opened higher on the news: the Hang Seng Index gained 0.53% and the Hang Seng Tech Index rose 0.85%. Morgan Stanley had earlier flagged the potential for an AI-driven re-rating of Hong Kong tech stocks, and today's moves suggest that thesis is playing out.
The question now is whether other AI names follow Zhipu's trajectory, and whether the target raise holds as computing access and monetization play out.
