China’s Zhipu Gets Lone ‘Short’ Call After 1,100% Rally
Zhipu, the hottest stock on Hong Kong’s HSTECH Index this year, received its first bearish call from Hedgeye Risk Management after a 1,100% rally, citing lack of pricing power amid a price war triggered by DeepSeek’s V4 model.
China’s artificial intelligence firm Zhipu has received its first bearish analyst call after a staggering 1,100% rally this year, with Hedgeye Risk Management issuing a ‘short’ recommendation and setting a fair value target of HK$407. The stock has been the best performer on Hong Kong’s HSTECH Index in 2026, driven by investor enthusiasm for China’s AI sector. However, analyst Felix Wang argues that Zhipu lacks pricing power, particularly after the release of DeepSeek’s V4 model, which has intensified competition and triggered a price war among Chinese AI firms.
The bearish call highlights growing concerns about valuation sustainability in China’s AI space. Zhipu’s meteoric rise has been fueled by optimism over its large language models and potential to compete with global players. However, the emergence of DeepSeek’s V4 model has increased competitive pressure, eroding Zhipu’s ability to command premium pricing. For equity traders, this serves as a reminder that even high-growth sectors can face sharp corrections when fundamentals are questioned. Traders can monitor Zhipu’s price action and sector sentiment on NowPrice’s live stocks dashboard to track real-time moves.
Looking ahead, the key catalyst for Zhipu will be its ability to differentiate its offerings amid the price war. Investors will watch for upcoming earnings reports and any product announcements that could restore pricing power. The broader HSTECH Index may also face volatility if other AI stocks come under similar scrutiny. The price war triggered by DeepSeek’s V4 model is likely to persist, making it crucial for Zhipu to demonstrate technological advantages or cost efficiencies to justify its valuation.