JPMorgan Chase Cries Foul on Dip Buying, Keeps Buy Rating to Boost Stock with Nearly 37% Intraday Rebound

BlockBeats News, July 21st, amidst the recent significant volatility in the US stock market AI chain, the market temporarily viewed Kimi K3 as a new "DeepSeek moment": a low-cost, high-performance, open-weight Chinese model, reigniting investors' concerns about US AI capital expenditure returns, model pricing power, and computing power demand. The Wall Street Journal reported that Moonshot AI's new model has heightened chip investors' anxiety.

JPMorgan Chase stated in its latest report on the Chinese artificial intelligence industry that Kimi K3 has indeed altered the valuation framework of leading-edge model companies in China. The report mentioned that following the release of K3, the market began to doubt the long-term competitiveness of companies like Zhitu and MiniMax, thus reducing their valuation multiples from around 30 times the 2030 projected P/ARR to 20 times.

However, JPMorgan Chase believes that Zhitu's price drop of over 50% has already overly reflected this pressure. The firm maintained a "Neutral" rating on Zhitu, lowering the target price from HK$2400 to HK$1600; MiniMax also maintained a "Neutral" rating, with the target price reduced from HK$240 to HK$160.

The core assessment of the report is that K3 has narrowed the lead window of GLM-5.2 but has not excluded Zhitu from the forefront of China's model lineup. JPMorgan Chase stated that GLM-5.2 still belongs to the top-tier production model group in China, and Zhitu will reassert its competitiveness in the coming months through the GLM-5.3 and 2T+ flagship models. If the new models can re-enter the cutting-edge array in coding, inference, and AI task, Zhitu still has the capability to sustain its commercial growth.

More importantly, the commercialization of Chinese models is still in its early stages. JPMorgan Chase estimated that Zhitu's latest indicative ARR is approximately $1 billion, DeepSeek is around $500 million, MiniMax and Kimi are each around $300 million, and the total of leading independent model suppliers in China is approximately $2.1 billion; in comparison, Anthropic's ARR has already reached around $69 billion. This indicates that the revenue scale of Chinese model companies is still significantly small, and the growth potential has not been entirely squeezed out by the emergence of Kimi K3.

Kimi K3 has also left another signal to the market: stronger domestic models are attempting to prove their capabilities with higher prices. The report mentioned that K3 API pricing is significantly higher than the previous generation K2.7 Code, reflecting its enhanced capabilities in high-value tasks such as coding. If customers are willing to pay for stronger inference, long-context, and programming capabilities, Chinese model companies' business models will shift from low-price competition to capability-based pricing.

Therefore, the tone of this report is not pessimistic. Kimi K3 has brought about a revaluation, magnifying the US stock market AI chain's concerns about "cheap Chinese models"; however, in JPMorgan Chase's view, this impact simultaneously proves that the Chinese model layer is approaching the global cutting edge. For Zhitu, the next round of model releases will be a key window for repricing.