Morgan Stanley cuts Tencent target as Tencent Holdings stock faces AI margin pressure

Published on 10/26/2026 at 09:35 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

AI spending is expected to pressure margins in 2026 and 2027. Tencent Holdings stock costs EUR 44.06 on October 26, 2026.

AI spending and valuation pressure

Morgan Stanley lowered its Tencent target to HKD 650 on October 26, 2026.
Tencent invested CNY 18.0 billion in AI products in 2025, with spending expected to more than double in 2026.
Tencent Holdings stock trades at EUR 44.06 at 9:30 a.m. CET at Lang & Schwarz on October 26, 2026.

Tencent Holdings Ltd., KYG875721634, Illustration mit AI erstellt.

Tencent Holdings Ltd. (ISIN KYG875721634) stock was trading at EUR 44.06 at Lang & Schwarz on October 26, 2026, at 9:30 a.m. CET. Morgan Stanley lowered its Tencent target from HKD 735 to HKD 650 on October 26, 2026, as higher artificial intelligence investment was expected to pressure near-term margins, according to GMT Eight.

AI spending sets the margin test

The Morgan Stanley report cut its estimates for Tencent's non-international financial reporting standards operating profit by 6.00 percent to 7.00 percent for 2026 and 2027. It also forecast 10.80 percent revenue growth in 2026 and 5.00 percent growth in non-international financial reporting standards operating profit, according to GMT Eight.

Three dates frame the latest move

On October 14, 2026, Tencent priced USD 1.8 billion and CNY 26.0 billion of notes. On October 22, 2026, it completed the USD 1.8 billion and CNY 26.0 billion issue. On October 26, 2026, Morgan Stanley cut its target from HKD 735 to HKD 650. Tencent's investor page lists the note transactions and the target company's latest investor materials at Tencent.

What date comes next?

Tencent's next quarterly results are scheduled for November 18, 2026, according to the company's investor calendar on Tencent. That date gives investors a defined checkpoint for judging whether heavier AI spending is translating into revenue growth.

Stock price stays under review

On HKEX, Tencent was last at HKD 386.40 on October 26, 2026, at 4:08 p.m. HKT after the Hong Kong session. The key issue for the next results is whether investment intensity eases the pressure on operating profit that prompted the target reduction. The further course of trading is shown by the continuously updated real-time quote of Tencent Holdings stock.