Jefferies Lowers Zhipu AI Target Price to HK$1,183.79 Amid Concerns Over Guidance Sustainability

Huo Xing Finance reports that on September 7, Jefferies released a report stating that Zhipu’s guidance of $2.4 billion in annual recurring revenue by end-2026 exceeded expectations, but its sustainability is questionable due to a high base in August, uneven growth in computing power supply, and high customer concentration with low switching costs. The report noted that although Zhipu’s cloud business gross margin improved in the first half of 2026, it may decline in the second half due to the launch of new domestic GPU clusters and the resumption of the Coding Plan; the target price was lowered from HK$1,299.8 to HK$1,183.79, with a “Hold” rating maintained. Jefferies raised its revenue forecasts for Zhipu from 2026 to 2029 by 37% to 119%, reflecting accelerated growth in the cloud segment, and reduced its net loss forecasts by 14% to 21%. In its sum-of-the-parts valuation, the multiple for the cloud segment was lowered from 50x 2026 forecasted annual recurring revenue to 30x to better align with overseas peers. The firm still believes the Chinese large language model industry is overly crowded and favors full-stack cloud service platforms with advantages in computing power, data, and monetization—such as Alibaba (09988.HK) and ByteDance—over independent AI labs.