Morgan Stanley describes MiniMax as a "rare global top-tier foundational model asset," with its high valuation core logic being "technology determines the ceiling, globalization determines the valuation."
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Morgan Stanley initiates coverage on MiniMax for the first time, giving an “Overweight” rating and a target price of HKD 930, positioning it as a “global AI foundation model leader”. In this report, Morgan Stanley is not truly betting on short-term profitability, but rather two main themes: whether the model capabilities are among the world's top tier, and whether the revenue structure has the flexibility for global expansion.
According to Wind Chaser Trading Desk, Morgan Stanley analyst Gary Yu, who is responsible for this coverage, judges that MiniMax has entered the global SOTA model ranks, has comprehensive multimodal capabilities, and highly scalable commercialization paths. On this basis, the company’s revenue is expected to grow from $75 million in 2025 to $700 million in 2027, achieving a 9-10x increase within two years. Once the technological capacity establishes a generational advantage, the revenue curve will show a “step-like” jump.
The explanation for the high valuation in the report is also very direct: this is an asset where “technology determines the revenue ceiling, globalization determines the valuation system”. If the model performance continues to reach global top-tier levels, the ceiling comes from the global TAM; and if the revenue structure is mainly overseas, the valuation anchor naturally aligns with international peer companies.
Technical capability is the starting point of valuation
Morgan Stanley summarizes MiniMax’s core competitiveness into three points: continuous iteration ability, multimodal layout, and cost efficiency.
In independent benchmark tests, when the MiniMax-M2 was released, it ranked fifth on the global LLM leaderboard; the latest flagship model MiniMax-M2.5 is ranked sixth, and fourth among open-source models. As of mid-February 2026, M2.5 ranked first on OpenRouter by token usage, reaching 1.97 trillion tokens, with a 58.8% market share in coding scenarios.
This data means that the model has entered high-frequency, real-world usage scenarios, rather than merely performing well in lab benchmarks.
More crucial is the cost structure. The company uses MoE architecture and Linear Attention mechanism, with model flop utilization exceeding 75% during inference, far above the industry average of 40-50%. Inference efficiency directly impacts the API price range and gross margin flexibility, which determines whether profit margins can improve in step with scale expansion.
Morgan Stanley expects the company’s gross margin to increase from 12% in 2024 to 32% in 2027. However, during the same period, operating losses will continue to increase; the 2027 non-IFRS operating loss is estimated at about $484 million. This is not a profit inflection logic but rather a path of “first expand technology and scale, then look at profits”.
Leading technology does not guarantee profitability, but it determines the upper limit of revenue.
Revenue structure determines growth slope
MiniMax’s business model is not driven by a single product but has three parallel lines:
- 2C: Agent and companion products Talkie/Xingye
- 2P: Hailuo AI, MiniMax Audio
- 2B: Open Platform API
By the first nine months of 2025, the company's MAU increased from 3.1 million in 2023 to 27.6 million, with 1.77 million paying users. The revenue structure is getting more diversified, and the share of Open Platform keeps rising.
Morgan Stanley expects revenue from Open Platform to rise from 29% in 2024 to 40% in 2027, with a three-year compound growth rate exceeding 200%. After breakthrough model capability is achieved, enterprise API demand is likely to see a “leap” in capacity.
The report highlights an industry feature: the growth of foundation model companies is often triggered by key generational models, rather than a smooth climb. OpenAI’s ChatGPT 3.5 and Anthropic’s Claude 3.5 Sonnet both saw revenue jumps after model upgrades.
Whether MiniMax will replicate this rhythm depends on the next-generation model to be launched in mid-2026.
Globalization is the premise for valuation
Morgan Stanley particularly highlights MiniMax’s “Born Global” path.
Overseas revenue share has increased from 19% in 2023 to 73% in the first nine months of 2025. The regional breakdown is: Asia Pacific 61%, Americas 24%, EMEA 15%.
Against a backdrop where the global foundation model market size is expected to grow from $10.7 billion in 2024 to $206.5 billion in 2029 (CAGR 80.7%), the company’s current global market share is only about 0.3%. As long as the share increases slightly, revenue elasticity will become apparent.
Even more important is the valuation system. If revenue mainly comes from overseas markets and clients are mainly API and subscription-based, the valuation logic is closer to international AI peers, rather than traditional Chinese software companies.
This is also the core rationale for Morgan Stanley assigning a 54x 2027 P/S multiple.
Divergence in valuation focuses on the “next-generation model”
Three scenario assumptions are very clearly divided:
- Base case: $700 million revenue in 2027, corresponding to 54x P/S, target price HKD 930.
- Optimistic case: $1 billion revenue in 2027, target price HKD 1,240.
- Pessimistic case: $400 million revenue in 2027, target price HKD 300.
There is only one variable that determines valuation differences: whether the next-generation model to be launched in mid-2026 reaches or surpasses the global SOTA level.
Risks are similarly focused: GPU supply and geopolitics, resource gap with Reactivation OpenAI and other hyperscalers, price pressure from model commoditization, and ongoing cash burn.
This is pricing “technical achievement capability”
Morgan Stanley does not shy away from challe Reality: so far, no pure AI foundation model company has achieved stable profitability. MiniMax’s average monthly cash burn is expected to be about $27.9 million in 2025; profitability visibility remains limited.
But the core view of the report is this: competition in the foundation model industry is not about marketing, but about generational breakthroughs. Technical ability determines the revenue ceiling, and the global market determines the valuation anchor.
If model upgrades bring nonlinear revenue expansion, the current valuation is merely a pre-discount on future scale; if the model fails to remain in the global first tier, the valuation will shrink just as quickly.
This is a bet on the pace of turning technology into reality. Morgan Stanley chooses to stand on the side of “scarce top-tier foundation model assets.”
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The above content is from Wind Chaser Trading Desk.
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