JPMorgan has issued a research report, increasing the target price for KNOWLEDGE ATLAS (02513) from HK$2,000 to HK$2,400 while maintaining an "Overweight" rating, citing a more transparent outlook for annual recurring revenue.

The firm believes the foundational model industry is transitioning into a phase requiring greater capital intensity, where the ability to secure funding will support extended model development cycles and infrastructure expansion.

However, the ultimate return on investment will still hinge on each company's capacity to convert resources into enhanced model capabilities, higher customer adoption, and growth in annual recurring revenue.

For KNOWLEDGE ATLAS, current demand is nearing its service capacity limit. The addition of new computational resources is anticipated to translate into annual recurring revenue growth within a 12-month timeframe, with the conversion effect from this financing round already being quite evident.