On Monday, shares of Zhipu, a Chinese AI model developer, experienced a dramatic increase, peaking at 48% before settling at a 33% gain, trading around 1,461 Hong Kong dollars ($186).
This surge followed JPMorgan's decision to maintain an overweight rating on Zhipu and raise its target price from HK$950 to HK$1,400, highlighting the company's strong model visibility and pricing power in a competitive market. In contrast, JPMorgan downgraded domestic rival MiniMax, which saw a modest 7.4% increase in its shares.
Bank of America also initiated coverage on both companies with 'buy' ratings, setting target prices of HK$1,250 for Zhipu and HK$500 for MiniMax. The backdrop for this optimism includes recent U.S. government restrictions on Anthropic's advanced AI models, which have heightened the competitive landscape for AI talent and technology.
Zhipu's upcoming release of its GLM-5.2 model as open-source software with no usage restrictions positions it favorably against U.S. firms facing tighter regulations. Analysts from Bank of America noted that Chinese AI models are gaining traction as cost-effective alternatives, particularly as U.S. pricing for advanced models rises.
Zhipu's market capitalization reached HK$489 billion, significantly outpacing MiniMax's HK$124.2 billion, reflecting its superior growth prospects and investor confidence. Both companies are also preparing for listings on China's STAR Market, with analysts suggesting MiniMax could be a potential catch-up trade given its favorable price-to-sales ratio compared to Zhipu