Morgan Stanley raised Zhipu's Hong Kong target price by 72% from HK$990 to HK$1,700, as reported by BeInCrypto. The investment bank cited two key improvements driving the upgrade: better access to computing power, the hardware infrastructure required to train and run AI models, and the completion of a new financing round. The stock has responded strongly to this positive analyst action, gaining 37% over five trading days.
According to BeInCrypto, analyst Gary Yu and colleagues argue that China's AI industry is moving away from the price war era. The bank states that "China's large-model industry is establishing a healthier commercialization environment," with the sector shifting "from price competition to monetization driven by model intelligence." This strategic pivot means that smarter models generate revenue rather than the cheapest ones, potentially changing how investors value the entire AI sector.
Founded in 2019, Zhipu is best known for its GLM series of large language models and successfully raised $4 billion in a Hong Kong share offering earlier this year, as reported by BeInCrypto. The company has undergone a significant rebranding in 2025, changing its name from Zhipu AI to Z.ai internationally. As of 2024, it is one of China's six "AI tiger" companies by investors and considered to be the third-largest LLM market player in China's AI industry according to the International Data Corporation. The company's flagship GLM family of large language models has been released under the free and open-source MIT License since July 2025.
According to BeInCrypto, Morgan Stanley had previously flagged the potential for a broad AI-driven re-rating of Hong Kong tech stocks. The bank's report covered multiple companies, with MiniMax receiving a more cautious assessment despite staying "constructive" with a lowered target to HK$900. Alibaba drew a bullish mention, with analysts highlighting its end-to-end AI capabilities, computing power advantages, and expanding cloud margins. The broader market responded positively, with the Hang Seng Index opening 0.53% higher and the Hang Seng Tech Index up 0.85%.
