China's AI stock rally gets a Jensen Huang boost: Why analysts remain bullish

• Access to Nvidia's H200 chips is viewed as critical for China's AI ambitions; Trump administration approved H200 licenses months ago, but Chinese authorities have been cautious, having rejected less-advanced H20 chips last year.
• Morgan Stanley raised its price target for Knowledge Atlas to HK$990 from HK$560 and MiniMax to HK$1,100 from HK$990, citing commercialization acceleration and Zhipu's coding capabilities.
• Chinese AI model pricing has risen to 17% of US model costs in Q1 2026 from just 5% a year earlier, while analysts forecast each frontier AI developer could generate at least $1 billion in revenue this year, potentially doubling next year.

Summary

Chinese AI stocks MiniMax Group and Knowledge Atlas rallied sharply following Nvidia CEO Jensen Huang's visit to Beijing as part of Trump's business delegation. The visit sparked investor optimism about potential approval for Nvidia to sell its advanced H200 chips to Chinese customers, reversing years of export restrictions.

Key Companies and Figures

MiniMax Group (HK: 2175) and Knowledge Atlas (HK: 2390), which operates Zhipu AI, are positioned as primary beneficiaries. Both companies went public in Hong Kong earlier this year and are expected to join the Hang Seng Tech Index on June 8, potentially driving $1.25-1.75 billion in passive inflows.

Analyst Outlook

Brokerages have turned bullish on Chinese AI developers:

• China Merchants Securities initiated buy ratings with target prices of HK$1,282 for Knowledge Atlas and HK$982 for MiniMax
• Morgan Stanley raised targets to HK$990 (from HK$560) for Knowledge Atlas and HK$1,100 (from HK$990) for MiniMax
• Analysts forecast China's frontier AI developers could each generate at least $1 billion in revenue this year, potentially doubling next year

Market Dynamics

The cost gap between Chinese and US AI models is narrowing. Chinese models now cost approximately 17% of US equivalents in Q1, up from just 5% a year earlier. Tech companies represent 40% of Hong Kong IPO fundraising year-to-date, reinforcing AI's growing market influence.

Key Risk

Regulatory uncertainty persists. China previously rejected Nvidia's less advanced H20 chips, and any reversal on H200 access could undermine the rally's momentum.