DeepSeek · China · Crypto Briefing
Hedgeye analyst recommends short position on Zhipu after 1,100% rally
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Felix Wang calls the Chinese AI stock 'one of the biggest bubbles the reporter has ever seen' and sets a fair value target nearly 70% below current trading levels.
Key facts
- Felix Wang of Hedgeye Risk Management is recommending a short position on the Chinese AI developer, pegging its fair value at HK$407
- Zhipu, the company behind the GLM series of large language models, went public on January 8 at approximately HK$116 per share
- Wang’s HK$407 fair value estimate implies that Zhipu would need to fall roughly 70% from current levels to reach what he considers reasonable
- In May, DeepSeek finalized a permanent 75% price cut on its V4-Pro model
Summary
Zhipu has been the best-performing stock on the Hang Seng Tech Index this year. Felix Wang of Hedgeye Risk Management is recommending a short position on the Chinese AI developer, pegging its fair value at HK$407. Zhipu, the company behind the GLM series of large language models, went public on January 8 at approximately HK$116 per share. Wang described Zhipu as “one of the biggest bubbles I’ve ever seen,” citing eroded pricing power in the wake of DeepSeek’s aggressive moves.