Morgan Stanley Raises Zhipu Target Price by Nearly 72%, Bullish on Computing Power and Financing Improvements
Miles Bennett
Morgan Stanley hiked Zhipu's target price from roughly HK$990 to HK$1,700 — a near-72% jump — citing simultaneous improvements in compute access and a new funding round that remove the two main growth bottlenecks, while arguing that China's large-model industry is shifting from price wars to monetizing model intelligence, a narrative change with repricing implications for the entire AI sector.
Why raise the target price 72% in one go?
Morgan Stanley on Thursday lifted Zhipu's target from roughly HK$990 to HK$1,700, a near-72% increase.
The core thesis: two bottlenecks cleared at once — compute access keeps improving, and a new funding round has landed.
This means → without compute, models can't be trained or run; without funding, the cash-burn phase stalls. Both gates opening together is what lets the growth forecast jump.
The news pushed Zhipu up over 4% intraday; over the past five sessions it has rallied more than 37%.
How has the industry narrative shifted — from price wars to who's smarter?
Morgan Stanley analyst Gary Yu and team wrote: "China's large-model industry is building a healthier commercialization environment."
The previous consensus fear: open-weight models (releasing model parameters publicly so anyone can use them) would commoditize products and trigger a sustained price war.
Morgan Stanley now argues the industry is "moving from price competition to monetizing model intelligence." In plain terms = the winner is no longer whoever is cheapest, but whoever builds the smarter, more useful model.
This reflects a potential repricing of valuation logic across the entire China AI sector.
Why was MiniMax's target cut instead?
In the same report, Morgan Stanley lowered MiniMax's target to HK$900.
Analysts remain "constructive" and flag the upcoming M3 upgrade and M3 Pro as key catalysts.
But the cut stems from growth "skewing more to later periods." This means → near-term delivery is slower than Zhipu's, and markets discount waiting.
What about Alibaba and the broader market mood?
Morgan Stanley is also bullish on Alibaba, citing full-stack AI capabilities, compute advantages, and years of cloud-revenue growth that provide room for margin expansion.
Hong Kong equities were warm on the day: the Hang Seng Index opened up 0.53% at 25,805.18; the Hang Seng Tech Index rose 0.85%; MiniMax gained 4.8%.
The next key test: whether Zhipu can convert its dual improvement in compute and funding into sustained earnings delivery — that will determine if this repricing holds.
Content is for reference only, not financial advice.