China's Unitree Robotics Shares Surge Over 60% in Less Than Two Weeks despite Industry Risks Warning

Unitree Robotics shares have surged more than 60% since October 15, lifting its market value to 271.8 billion yuan, after JPMorgan issued a rare double-upgrade and founder Wang Xingxing predicted a physical AI breakthrough within one to three years.

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Unitree Robotics is on a tear. Shares of the Chinese humanoid robot maker have risen more than 60% since October 15, lifting its market value to 271.8 billion yuan (about $38 billion), as investors bet that advances in AI models will accelerate the development of "physical AI" capable of controlling robots in real-world tasks.

The stock hit the daily limit of 20% on October 23 before closing at 624 yuan. On October 26, it ended up 7.69% at 672 yuan. The rally has been fueled by two catalysts: comments from founder Wang Xingxing at the World Physical AI Conference in Hangzhou, and a dramatic reversal from JPMorgan.

The JPMorgan Double-Upgrade

JPMorgan upgraded Unitree to "overweight" from "underweight" on October 26, raising its target price to 995 yuan from 300 yuan a two-step increase that is rare on Wall Street. The bank had previously judged Unitree overly dependent on hardware and lacking software competitiveness. It changed its view after hearing from Wang and other executives at the Hangzhou conference and reviewing the company's humanoid product lineup. The new target implies about 20% upside from Unitree's Friday close.

Wang's Prediction

Speaking at the conference on October 22, Wang predicted that large-scale AI models could create a breakthrough in physical AI within one to three years. "If everything goes smoothly, it will take 1 to 2 years; if not, it will take 2 to 3 years," he said. He also claimed that OpenAI's GPT-6 Astra can issue commands to robots without separate training.

The remarks shifted the narrative around Unitree. Previously seen as a hardware company selling robot bodies, the company is now being valued on the promise of an AI brain that can make those bodies useful.

The Risks Unitree Itself Has Warned About

The rally comes despite Unitree's own warnings about industry risks. In its prospectus, the company explicitly named Tesla as a potential threat, stating that Tesla's Optimus Gen-3 has begun small-batch trial production and will compete directly with Unitree in the future.

Unitree also admitted that its previous R&D investments focused on the "body" and "cerebellum" motion control and limb coordination with less investment in the "brain," or embodied large models. The company said it had not conducted large-scale real-world data collection or factory deployment training, and that many peers have moved ahead in this field.

"The success probability of Unitree's self-developed large robot model is less than 50%," Wang has said. "Unitree ranks first in the world in making robot bodies; but it is not easy to win the battle of making brains."

The Valuation Question

Even after the surge, the debate over Unitree's valuation remains fierce. The stock trades at a rolling price-to-earnings ratio of 388 times, compared to the general equipment manufacturing industry average of 39.5 times. At its peak in August, Unitree's valuation briefly exceeded $66 billion before crashing nearly 45% in the weeks that followed. Chinese business media reported that Unitree has recently warned investors about valuation risks related to the share-price surge.

Here is the question The Silicon Review raises. Unitree's own prospectus admits its AI brain is years behind its competitors, yet its stock is surging on the promise of physical AI. When a company tells you it has not solved the hardest problem, why is the market pricing it as if it already has?

FAQ:

Q: How much have Unitree shares risen since October 15?
A: Unitree shares have risen more than 60% since October 15, lifting its market value to 271.8 billion yuan.

Q: Why did JPMorgan upgrade Unitree?
A: JPMorgan upgraded Unitree to overweight from underweight after hearing founder Wang Xingxing's comments at the World Physical AI Conference and reviewing its humanoid product lineup.

Q: What did Wang Xingxing predict about physical AI?
A: Wang predicted a breakthrough in physical AI within one to three years, saying GPT-6 Astra can issue commands to robots without separate training.

Q: What risks has Unitree warned about in its prospectus?
A: Unitree named Tesla as a direct competitor and admitted it had invested less in AI "brain" development than peers, with a less than 50% success probability for its self-developed model.

Q: What is Unitree's current valuation?
A: Unitree's market value stands at approximately 271.8 billion yuan (about $38 billion) after the recent rally.