Goldman Sachs GC Tech: ZEPP (ZEPP.US) Mgmt. Visit: AI Wearables Diversifying Product Lines; Fitness and Outdoor Activities Driving Demand
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Goldman Sachs met with ZEPP (ZEPP.US, Not Covered) management at the GS Tech AI Outlook Corporate Day on January 14, 2026. Management guided for rapid revenue growth and further profitability improvements in 2026, underpinned by a robust portfolio of new product launches.
The company plans to update and expand its existing lineup, spanning entry-level to high-end smartwatches, alongside running watches, lifestyle devices, straps, and rings. At CES, ZEPP showcased a food camera and AI glasses, highlighting active product diversification. Management noted that its smartwatches stand to benefit significantly from the rising popularity of fitness tracking and outdoor sports. The company maintains competitive advantages in hardware performance and feature richness while commanding a relatively low price premium.
Furthermore, ZEPP is actively exploring subscription-based business models to deliver enhanced software and AI functionalities. The company operates across 90 countries and continues to diversify its supply chain to mitigate tariff risks.
Goldman Sachs notes that ZEPP's positive tone aligns with its broader thesis: AI edge devices will see accelerating adoption as the underlying technology matures. While memory cost increases present a headwind, management views the impact as manageable since memory represents only a single-digit percentage of the bill of materials. Goldman Sachs also observes early signs of AI monetization, anticipating that software leaders like SenseTime and Kingsoft Office will benefit from integrating AI capabilities into practical applications.