That dynamic helps explain why Hong Kong‑listed AI startups have surged far more dramatically than larger technology companies. Reports indicate Zhipu’s stock has risen as much as about 699% while MiniMax has climbed nearly 400% in 2026, significantly outperforming the broader market .

With fewer shares circulating, demand from funds and retail investors can push prices upward quickly. The flip side is that liquidity remains fragile—when supply increases, prices can move just as sharply in the opposite direction.

Hang Seng Tech Index Inclusion Could Create Forced Demand

Another powerful driver is speculation about index inclusion. Analysts expect both MiniMax and Zhipu AI to join the Hang Seng Tech Index, potentially with a combined weighting of roughly 5%–7% .

If that happens, index‑tracking funds would need to purchase the stocks automatically. Estimates suggest the rebalance could generate about $1.25 billion to $1.75 billion in passive inflows .

Because traders anticipate this type of forced demand, they often buy shares ahead of the rebalancing. This "pre‑inclusion trade" can accelerate price gains long before the index change actually occurs.

However, the strategy carries a well‑known risk: once the inclusion happens, the event can turn into a “sell‑the‑news” moment if traders who bought early decide to take profits.

Lockup Expirations Could Test the Rally

The biggest near‑term risk may be IPO lockup expirations. During lockup periods, insiders and early investors are restricted from selling their shares. When the restriction ends, a significant amount of stock can suddenly become available.

For rapidly rising companies, that creates a strong incentive for early backers to realize gains. Market reports indicate that a lockup expiration period later in the year could represent a meaningful supply increase for these companies’ shares .

If a large number of early shareholders decide to sell, the additional supply could weaken prices—especially in stocks whose rallies were partly driven by scarcity.

Why Investors Prefer AI Pure Plays Over Tech Giants

Another notable feature of the rally is capital rotating toward AI‑focused startups instead of established platforms like Alibaba or Tencent.

The reason is largely narrative and positioning.

• Pure AI exposure: Companies like MiniMax and Zhipu are viewed as direct bets on China’s generative‑AI industry.
• Simpler growth story: Their valuation is tied primarily to AI model development and application growth, rather than a mix of e‑commerce, gaming, payments, and cloud businesses.
• Speculation on breakthrough apps: Investors are actively searching for Chinese AI companies that could produce "killer applications" capable of driving rapid adoption and revenue growth .

By contrast, Alibaba and Tencent remain diversified technology conglomerates. Even though they invest heavily in AI, the impact of those efforts is spread across large existing businesses, making the AI narrative less concentrated for investors.

Strong Hype, Weak Profits — For Now

Despite the market enthusiasm, financial fundamentals remain uncertain. Developing large AI models requires enormous spending on computing infrastructure and training, and both MiniMax and Zhipu have incurred substantial costs while scaling their technology .

For now, investors appear willing to tolerate losses in exchange for exposure to a fast‑growing industry. But that tolerance may depend on evidence that the companies can convert AI innovation into sustainable revenue.

The Bottom Line

The surge in Hong Kong’s AI startups reflects a combination of structural market forces and thematic investing. Limited free float, expectations of index inclusion, and strong demand for pure AI exposure have all pushed prices higher.

But the same dynamics that fueled the rally also create fragility. As lockups expire and liquidity increases, the market will get a clearer test of whether these valuations are supported by lasting growth—or were mostly the result of scarcity and momentum.

That dynamic helps explain why Hong Kong‑listed AI startups have surged far more dramatically than larger technology companies. Reports indicate Zhipu’s stock has risen as much as about 699% while MiniMax has climbed nearly 400% in 2026, significantly outperforming the broader market .

With fewer shares circulating, demand from funds and retail investors can push prices upward quickly. The flip side is that liquidity remains fragile—when supply increases, prices can move just as sharply in the opposite direction.

Hang Seng Tech Index Inclusion Could Create Forced Demand

Another powerful driver is speculation about index inclusion. Analysts expect both MiniMax and Zhipu AI to join the Hang Seng Tech Index, potentially with a combined weighting of roughly 5%–7% .

If that happens, index‑tracking funds would need to purchase the stocks automatically. Estimates suggest the rebalance could generate about $1.25 billion to $1.75 billion in passive inflows .

Because traders anticipate this type of forced demand, they often buy shares ahead of the rebalancing. This "pre‑inclusion trade" can accelerate price gains long before the index change actually occurs.

However, the strategy carries a well‑known risk: once the inclusion happens, the event can turn into a “sell‑the‑news” moment if traders who bought early decide to take profits.

Lockup Expirations Could Test the Rally

The biggest near‑term risk may be IPO lockup expirations. During lockup periods, insiders and early investors are restricted from selling their shares. When the restriction ends, a significant amount of stock can suddenly become available.

For rapidly rising companies, that creates a strong incentive for early backers to realize gains. Market reports indicate that a lockup expiration period later in the year could represent a meaningful supply increase for these companies’ shares .

If a large number of early shareholders decide to sell, the additional supply could weaken prices—especially in stocks whose rallies were partly driven by scarcity.

Why Investors Prefer AI Pure Plays Over Tech Giants

Another notable feature of the rally is capital rotating toward AI‑focused startups instead of established platforms like Alibaba or Tencent.

The reason is largely narrative and positioning.

• Pure AI exposure: Companies like MiniMax and Zhipu are viewed as direct bets on China’s generative‑AI industry.
• Simpler growth story: Their valuation is tied primarily to AI model development and application growth, rather than a mix of e‑commerce, gaming, payments, and cloud businesses.
• Speculation on breakthrough apps: Investors are actively searching for Chinese AI companies that could produce "killer applications" capable of driving rapid adoption and revenue growth .

By contrast, Alibaba and Tencent remain diversified technology conglomerates. Even though they invest heavily in AI, the impact of those efforts is spread across large existing businesses, making the AI narrative less concentrated for investors.

Strong Hype, Weak Profits — For Now

Despite the market enthusiasm, financial fundamentals remain uncertain. Developing large AI models requires enormous spending on computing infrastructure and training, and both MiniMax and Zhipu have incurred substantial costs while scaling their technology .

For now, investors appear willing to tolerate losses in exchange for exposure to a fast‑growing industry. But that tolerance may depend on evidence that the companies can convert AI innovation into sustainable revenue.

The Bottom Line

The surge in Hong Kong’s AI startups reflects a combination of structural market forces and thematic investing. Limited free float, expectations of index inclusion, and strong demand for pure AI exposure have all pushed prices higher.

But the same dynamics that fueled the rally also create fragility. As lockups expire and liquidity increases, the market will get a clearer test of whether these valuations are supported by lasting growth—or were mostly the result of scarcity and momentum.