Key Takeaways:
- JPMorgan raised Zhipu's target to HK$1,400 from HK$950, reiterating overweight
- Shares surged as much as 48% before paring gains to 33% on Monday
- BofA also initiated coverage with a buy rating and HK$1,250 target
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Zhipu jumps 33% after JPMorgan hikes target to HK$1,400
Zhipu shares surged 33% on Monday after JPMorgan raised its price target to HK$1,400, citing the AI firm's pricing power in a fiercely competitive market. Knowledge Atlas Technology, the Hong Kong-listed entity behind Zhipu, soared as much as 48% to an intraday high before paring gains, last trading at around HK$1,461.
"Investors will increasingly focus on model capability, task completion rates and pricing power," JPMorgan analysts said in a note, reiterating their overweight rating on the AI developer. The bank simultaneously downgraded domestic rival MiniMax.
JPMorgan raised its revenue forecasts for fiscal 2026 through 2030 by 26% to 42% and lowered its adjusted net loss estimates. Zhipu has demonstrated pricing power by doubling its API prices this year while maintaining business volume growth, the analysts noted. The bank said developers who retreat quickly from premium pricing reflect a lack of market recognition for their model improvements.
The upgrade comes as the Trump administration ordered Anthropic to suspend access to its most advanced AI models for foreign nationals, potentially redirecting demand toward Chinese alternatives. Zhipu's market capitalization stood at HK$489 billion, nearly four times larger than MiniMax's HK$124.2 billion.
Bank of America analysts also initiated coverage on Monday with buy ratings on both Zhipu and MiniMax, setting targets of HK$1,250 and HK$500, respectively. BofA cited Zhipu's faster annual recurring revenue growth, stronger talent density, public backing and lead in enterprise revenue exposure as drivers of its premium valuation. The bank considers MiniMax a potential catch-up trade, noting its price-to-sales multiple compares favorably to Zhipu's as the gap is currently too wide given MiniMax's product breadth.
Zhipu over the weekend announced GLM-5.2, its latest open-source large model, would be released this week with no usage restrictions — a contrast to US developers facing mounting pressure to restrict frontier access. The company raised cloud API prices by 8% to 17% alongside its GLM-5.1 launch in April, its second price increase this year, responding to surging demand for AI services and pressure from investors to begin delivering profits.
Peter Alexander, managing director at Z-Ben Advisors, estimated that around 40% of US-based AI engineers were born in China, warning that the Anthropic curbs could trigger a brain drain toward Chinese AI companies including Zhipu, DeepSeek and Moonshot AI. "The very individuals who were responsible, perhaps not in whole but crucial, for creating the most powerful AI models in the world are now persona non grata," Alexander said in a note.
Zhipu's shares have surged more than tenfold since its initial public offering in January, buoyed by growing optimism over China's position in the global AI race. Both Zhipu and MiniMax are planning a secondary listing on China's STAR Market in Shanghai.
The price target upgrade shows Wall Street views Zhipu as a primary beneficiary of shifting AI demand dynamics. Investors will watch for the company's next quarterly update for evidence that its pricing power and enterprise adoption continue to accelerate.
This article is for informational purposes only and does not constitute investment advice.
