KNOWLEDGE ATLAS has delivered a report card that has caught Wall Street's attention, with full-year revenue more than doubling year-on-year. However, what truly shocked the market was a real-time data point disclosed after the earnings release:
As of March 31, 2026, the company's open platform API Annual Recurring Revenue (ARR) had surged to approximately RMB 1.7 billion (about USD 250 million), an increase of over 2.4 times from approximately RMB 500 million at the end of 2025, and a staggering 60-fold increase compared to 12 months prior. Both Morgan Stanley and JP Morgan consider this the biggest surprise from this earnings report. Even more convincing is that this growth was not simply driven by &#34;trading price for volume.&#34;
According to the Zhuifeng Trading Desk, JP Morgan specifically pointed out in its research report that KNOWLEDGE ATLAS's API platform token prices have increased by 83% year-to-date, while demand continues to accelerate—the simultaneous rise in volume and price is extremely rare amidst the current intense price war in the domestic large model market, directly proving that KNOWLEDGE ATLAS has established substantial pricing power in high-value scenarios such as programming and intelligent agents.
In terms of profitability path, KNOWLEDGE ATLAS's loss structure is undergoing a qualitative change. In 2025, the company's R&amp;D expenditure was approximately RMB 3.2 billion, roughly equivalent to its adjusted net loss. This implies that the gross profit generated by existing models is sufficient to cover sales and administrative expenses—the core business has achieved breakeven at the contribution level, and the entire loss is essentially an active investment in the iteration of the next generation of models.
JP Morgan believes that with the continuation of triple-digit revenue growth and the sustained expansion of API gross margins (from just 3% in 2024 to 19% in 2025), the timeline for profitability is becoming increasingly clear, with the company expected to achieve profitability in 2029.
<h2>ARR Explosion: From &#34;Year-End Target&#34; to &#34;On the Way&#34;</h2>
The core highlight of this earnings report is the ARR data disclosed by KNOWLEDGE ATLAS. As of March 31, 2026, the ARR for the open platform API reached approximately USD 250 million, a 6.4-fold increase from the beginning of the year and a 60-fold increase from 12 months ago.
The management's year-end target was USD 1 billion, and the current progress indicates that this target is not an unattainable vision but is rapidly on the track to realization.
Morgan Stanley listed the better-than-expected ARR performance in its research report as a core event that &#34;strengthens the investment thesis&#34; and defined it as a &#34;Major Surprise.&#34;
From a business structure perspective, cloud deployment revenue in the second half of 2025 increased by 431% year-on-year, far exceeding the 57% growth rate of private deployment. The proportion of cloud business in total revenue also rapidly increased from single digits to 26%. This structural shift signifies that KNOWLEDGE ATLAS's business model is evolving from heavy-asset, low-repeat project-based delivery to a light-asset, high-stickiness subscription-based API economy.
<h2>Simultaneous Rise in Token Volume and Price: Pricing Power is the Rarest Signal</h2>
Amidst the current &#34;price war&#34; in the domestic large model track, KNOWLEDGE ATLAS's ability to achieve an 83% increase in token prices year-to-date while demand grows rather than diminishes is worthy of deep interpretation.
JP Morgan analyst Olivia Xu clearly stated in her research report that the synchronized upward trend in volume and price is the clearest signal of growth driven by &#34;real model competitiveness&#34; and &#34;high-value workloads.&#34;
Specifically, for scenarios related to programming (Coding) and agents (Agent), customer payment logic has upgraded from &#34;charging by volume&#34; to &#34;paying for task completion quality, throughput, and stability&#34;—this is an essentially higher-dimensional business relationship. When customers are willing to pay a premium for better results, rather than solely pursuing the lowest unit price, pricing power has been quietly established.
From the perspective of model iteration, KNOWLEDGE ATLAS's rapid evolution from GLM-4.5/4.6/4.7 to GLM-5, and its continuous investment in production-grade programming, long-context reasoning, and multi-step execution stability, form the technological foundation supporting this pricing power.
<h2>Gross Margin Inflection Point: Cloud Business Crossing from Loss to Profitability</h2>
In the second half of 2025, the gross margin of KNOWLEDGE ATLAS's cloud deployment business significantly jumped from -0.4% in the first half to 22.4%, marking the official crossing of the profitability threshold for cloud business and entering a virtuous cycle driven by economies of scale.
On a group level, the gross margin of the open platform API has increased from 3% in 2024 to 19% in 2025, an increase of 16 percentage points.
JP Morgan expects that with continued scale expansion and ongoing optimization of model inference efficiency, this gross margin still has significant room for improvement. According to their forecast model, the overall group gross margin will remain around 31% in 2026, further recovering to 36% in 2027, and reaching 37% in 2028.
It is worth noting that the full-year gross profit in 2025 was approximately RMB 297 million, while the total sales and administrative expenses were approximately RMB 896 million, and R&amp;D expenditure was approximately RMB 3.2 billion. If R&amp;D investment is excluded, the gross profit is sufficient to cover non-R&amp;D operating costs, meaning KNOWLEDGE ATLAS's core business model possesses self-sustaining capabilities, and the current losses are entirely due to strategic R&amp;D investment, not flaws in the business model itself.
<h2>Private Deployment: Upgrade Potential of Existing Assets</h2>
In addition to the explosive growth of cloud API business, KNOWLEDGE ATLAS's foundation in private deployment accumulated in regulated industries in China is also an important pillar of JP Morgan's investment thesis. In the second half of 2025, private deployment revenue reached RMB 372 million, a year-on-year increase of 57%, and its absolute scale is still more than double that of the cloud business.
JP Morgan believes that this massive existing customer base has unique strategic value: as foundational models continue to iterate and upgrade, these deployed customers have a natural demand for upgrades, which is expected to evolve into cyclical, predictable upgrade-driven revenue.
The high sensitivity to data security in regulated industries such as finance, government, and energy also means that private deployment will remain an indispensable delivery model in the foreseeable future, forming a structural moat that differentiates KNOWLEDGE ATLAS from pure cloud competitors.
<h2>JP Morgan Significantly Raises Price Target</h2>
JP Morgan maintained its &#34;Overweight&#34; rating and raised its price target from HKD 800 to HKD 950, based on a 30x expected P/E ratio for 2030, discounted to the end of 2026 at a 15% weighted average cost of capital. The 30x valuation premium primarily reflects the company's expected average annual compound revenue growth rate of over 100% from 2026 to 2030.
According to the latest forecast, KNOWLEDGE ATLAS's revenue in 2026 will reach RMB 3.192 billion (a year-on-year increase of 341%), rising to RMB 7.257 billion in 2027, soaring to RMB 19.725 billion in 2028, and is expected to exceed RMB 98.8 billion by 2030. Adjusted net profit is expected to turn positive in 2029, reaching RMB 2.822 billion, and further increasing to RMB 20.36 billion in 2030.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/8e5f4f51-8697-4c41-a8f2-0d6bc230c2a0.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/8e5f4f51-8697-4c41-a8f2-0d6bc230c2a0.png"/>
Morgan Stanley also maintained its &#34;Overweight&#34; rating, with a price target of HKD 560, using a DCF valuation method assuming a 15% WACC and a 3% perpetual growth rate, corresponding to an approximately 53x price-to-sales ratio in 2027. Although the two institutions have differences in their methodologies, their judgments on KNOWLEDGE ATLAS's long-term value are highly consistent.

Zhipu, a leading large-scale model manufacturer in China, released its full-year results for 2025, with revenue exceeding RMB 724 million, a year-on-year increase of 132%, and a gross profit margin of 41%, solidifying its position as the largest large-scale model company in China by revenue. Strong performance, coupled with continued strong sales of GLM-5 and the expansion of enterprise-level clients to over 20,000, boosted market confidence and drove the stock price higher throughout the day.Zhipu's better-than-expected performance raises the question: is this the beginning of a valuation reshaping, or just a short-term sentiment boost? Should you enter the market now or wait for a pullback? Feel free to leave your comments below!

Zhipu, a leading large-scale model manufacturer in China, released its full-year results for 2025, with revenue exceeding RMB 724 million, a year-on-year increase of 132%, and a gross profit margin of 41%, solidifying its position as the largest large-scale model company in China by revenue. Strong performance, coupled with continued strong sales of GLM-5 and the expansion of enterprise-level clients to over 20,000, boosted market confidence and drove the stock price higher throughout the day.Zhipu's better-than-expected performance raises the question: is this the beginning of a valuation reshaping, or just a short-term sentiment boost? Should you enter the market now or wait for a pullback? Feel free to leave your comments below!

Zhipu’s revenue surged 132%! Is this AI rally making a comeback?

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KNOWLEDGE ATLAS's open platform API has achieved an Annual Recurring Revenue (ARR) of RMB 1.7 billion, an increase of approximately 60 times compared to 12 months ago. JP Morgan believes that KNOWLEDGE ATLAS's API platform token prices have risen by 83% year-to-date, while demand continues to accelerate—the simultaneous rise in volume and price is extremely rare amidst the current intense price war in the domestic large model market, directly proving that KNOWLEDGE ATLAS has established substantial pricing power in high-value scenarios such as programming and intelligent agents

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KNOWLEDGE ATLAS

Wall Street on KNOWLEDGE ATLAS Earnings: ARR Explosion is the Biggest Surprise, Simultaneous Rise in Token Volume and Price Indicates Substantial Pricing Power