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Morgan Stanley raised its price target for Chinese AI startup Zhipu by nearly 72% on Thursday, helping extend a five-day stock rally above 37%. The bank said stronger computing access and fresh financing improved Zhipu’s outlook. It also argued that China’s AI market is moving beyond aggressive price competition.
Analyst Gary Yu and colleagues lifted Zhipu’s Hong Kong target from HK$990 to HK$1,700. They cited better access to computing power and the completion of a new financing round. Computing capacity remains central to AI development because companies need hardware to train and operate large models. Better access can support faster development and wider commercial deployment.
Zhipu, founded in 2019, is known for its GLM family of large language models. The company raised $4 billion through a Hong Kong share offering earlier this year.
Morgan Stanley said the competitive structure of China’s large-model market is changing. Earlier concerns focused on open-weight models, product similarity, and persistent price cuts across competing platforms.
The bank now sees a healthier commercial environment forming around model quality and usefulness. Yu described the shift as moving “from price competition to monetization driven by model intelligence.”
That change could alter how investors assess companies across the sector. Can model intelligence replace low pricing as the main driver of China AI revenue growth?
Morgan Stanley kept a constructive view on MiniMax but lowered its price target to HK$900. The bank expects the company’s strongest growth to arrive later rather than in the near term. It also identified the coming M3 upgrade and M3 Pro as potential catalysts. MiniMax shares still gained 4.8% on Thursday despite the lower target.
Alibaba received a positive assessment based on its full-stack AI capabilities, computing resources, and established cloud business. Analysts also pointed to room for further cloud margin expansion. The wider Hong Kong market moved higher alongside the AI stocks. The Hang Seng Index opened 0.53% higher, while the Hang Seng Tech Index advanced 0.85%.
Zhipu’s five-day gain reflected a rapid market response to Morgan Stanley’s revised outlook. The report linked stronger company fundamentals with a broader shift toward intelligence-led commercialization in China’s AI industry.
Morgan Stanley’s higher Zhipu target followed improved computing access and new financing as the stock extended its five-day rally. Meanwhile, the bank sees China AI competition shifting toward model intelligence and monetization, while maintaining separate outlooks for MiniMax and Alibaba as Hong Kong technology shares advance.
