Zhihu Inc. (NYSE: ZH), the Chinese question-and-answer platform, saw its stock surge 10.20% in pre-market trading on Tuesday, as investors eagerly anticipate the company's upcoming earnings announcement and react to recent positive developments.

The significant pre-market rally comes as Zhihu prepares to hold a board meeting on August 27 to consider and approve its interim results. Investor optimism is likely fueled by the company's strong performance in the first quarter of 2025, where it achieved non-GAAP profitability for the first time since its listing. The Q1 results showed a remarkable improvement in gross profit margin, rising from 56.6% to 61.8% year-over-year, and a substantial 93.9% reduction in net loss. Zhou Yuan, Chairman and CEO of Zhihu, attributed this success to the company's refined operational strategy and the deep integration of artificial intelligence within Zhihu's ecosystem.

Adding to the positive sentiment, globally renowned investment institution Fidelity International has significantly increased its holdings in Zhihu's Hong Kong-listed shares (ZHIHU-W) over the past six months. Fidelity's stake grew from 1.83% to 5.01% of all outstanding Class A ordinary shares, marking its third increase since the end of 2024. This move, coupled with upgraded ratings and raised target prices from major analysts including CLSA, Citigroup, and China International Capital Corporation, underscores growing institutional confidence in Zhihu's long-term prospects. The company's successful AI integration and improved operational efficiency appear to be attracting both investor interest and user engagement on the platform.