Zhipu AI surges over 24% as LLM frenzy hits Hong Kong

Hong Kong-listed artificial intelligence stocks surged in afternoon trading, with Zhipu AI climbing over 24 percent and MINIMAX jumping more than 14 percent, as investors pour capital into large language model developers outside of the crowded U.S. market.

The rally reflects a broader search for value in the technology sector. "At these levels, even very strong results may fail to impress investors," David Wagner, an analyst at Investing.com, said in a recent note regarding high-flying U.S. tech stocks. "Some investors may prefer technology companies that still trade at more reasonable valuations."

The sharp gains in Hong Kong stand in contrast to the recent performance of U.S. AI bellwether Nvidia (NASDAQ:NVDA), which saw its stock decline after its last three quarterly reports despite beating expectations. While Nvidia's data center revenue nearly doubled to $75.2 billion, its stock, trading at nearly 45 times trailing earnings, has struggled for further upside, pushing investors to scout for alternatives. The Philadelphia Semiconductor Index has surged more than 50 percent in just six weeks, adding to concerns that U.S. markets are pricing in years of perfect growth.

The capital rotation into Asia's AI sector suggests a new phase in the global AI trade, potentially creating a significant valuation uplift for Hong Kong's technology leaders. The trend is reinforced by strategic investments in the region, such as NewGenIVF's (NASDAQ:NIVF) recent funding of APAC-focused AI platform K25.ai at a $100 million valuation, signaling that institutional capital is actively seeking exposure to the Asian AI market.

The investor enthusiasm for Hong Kong's AI sector is building as valuations for U.S. counterparts reach historic highs. Nvidia, with a market capitalization of approximately $5.3 trillion, has become a victim of its own success; its latest 85 percent year-over-year revenue jump to $81.6 billion was not enough to prevent a post-earnings share price dip. This dynamic is forcing a re-evaluation of where future growth lies.

Companies like Zhipu AI and MINIMAX are emerging as primary beneficiaries of this shift. While smaller than their U.S. rivals, they represent a direct play on the expansion of AI in Asia. The surge is not isolated, reflecting a broader bullish sentiment across the region's tech landscape. This was further evidenced by the recent strategic investment into K25.ai, an AI-native prediction platform led by tech veteran Andy Cheung. The deal underscores a growing appetite for APAC-specific AI ventures that can cater to local markets.

For investors, the rally in stocks like Zhipu and MINIMAX presents a new set of opportunities and risks. The search for "undervalued" AI plays, as highlighted by the screen for alternatives like Pegasystems (NASDAQ:PEGA) and Futu Holdings (NASDAQ:FUTU), is now clearly extending to Hong Kong. The question for the market is whether these companies can translate their current stock momentum into fundamental growth that justifies the new wave of investment, or if this is simply a spillover of speculative frenzy from the U.S.

This article is for informational purposes only and does not constitute investment advice.