ZTE Corporation's stock surged 5.31% during intraday trading on Monday, marking a significant upward movement for the telecommunications equipment company.
The rally follows Morgan Stanley's upgrade of ZTE's H-share rating from "Equal-Weight" to "Overweight" and its increased target price from HK$31.5 to HK$39. The bank cited potential positive catalysts from ZTE's artificial intelligence initiatives, including its deepening collaboration with ByteDance on the Doubao AI assistant, which integrates intelligent agents and multimodal capabilities into smartphones.
Additionally, ZTE's partnership with Tencent on AI cloud computing further enhances its AI commercialization pathway. Morgan Stanley expects the company to return to positive earnings growth in the second half of the year, supported by a low base effect, with short-term earnings risks largely priced in.
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