Tencent Holdings stock faces AI spending reset from Morgan Stanley
Published on 09/30/2026 at 11:35 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS
Tencent Holdings Limited (ISIN KYG875721634) was trading at EUR 48.23 at Lang and Schwarz on September 30, 2026 at 11:32 a.m. CEST, down 0.31 percent from the EUR 48.38 prior close. The immediate issue is AI spending: Morgan Stanley lowered its Tencent price target from HKD 735.00 to HKD 650.00 on September 29, 2026.
Morgan Stanley cuts target
According to GMT EIGHT on September 29, 2026, Morgan Stanley said Tencent is increasing investment in foundation models, new AI products and graphics processors. The bank reduced its target from HKD 735.00 to HKD 650.00 and reiterated an overweight rating.
The report projected Tencent revenue growth of 10.8 percent in 2026, while non-IFRS operating profit growth was expected at 5 percent. Morgan Stanley also said non-IFRS operating profit estimates for 2026 and 2027 were cut by 6 percent to 7 percent as AI investment rises.
Q2 growth funds the AI push
The latest operating figures show why Tencent can fund the strategy. In the Q2 2026 earnings call transcript carried by Yahoo Finance, management reported CNY 204.8 billion of revenue, up 11 percent year over year, and CNY 68.4 billion of non-IFRS net profit attributable to equity holders, up 9 percent.
Non-IFRS operating profit reached CNY 75.6 billion, up 9 percent, while the figure excluding new AI products was CNY 86.1 billion, up 19 percent. That comparison captures the tradeoff: established businesses are expanding faster than the reported operating result because the new AI portfolio is absorbing investment.
Cash flow shows the cost
Operating capital expenditure reached CNY 51.8 billion in Q2 2026, up 190 percent year over year, and free cash flow was negative CNY 13.8 billion, according to the same Yahoo Finance transcript. Excluding compute prepayments, management said free cash flow would have been positive CNY 37.6 billion, making the financing effect of AI infrastructure explicit.
For investors, the next test is conversion rather than launch volume. Tencent management said WorkBuddy, CodeBuddy and Hunyuan are being developed across the company ecosystem, while the Q2 non-IFRS operating margin excluding new AI products reached 42 percent, up 2.8 percentage points year over year.
Stock remains below yearly high
Tencent was trading at EUR 48.23 at Lang and Schwarz on September 30, 2026 at 11:32 a.m. CEST, down 0.31 percent versus the EUR 48.38 prior close. The primary listing is HKEX, where the finance quote showed a market capitalization of HKD 3.9 trillion and a 52-week range of HKD 411.00 to HKD 683.00 as of September 30, 2026.
Tencent Holdings stock facts
- Company: Tencent Holdings Limited
- ISIN: KYG875721634
- Ticker: 0700
- Primary exchange: HKEX
- Price Lang and Schwarz (as of September 30, 2026, 11:32 a.m. CEST): EUR 48.23
- Change versus prior close: minus 0.31 percent
- Prior close Lang and Schwarz (September 29, 2026): EUR 48.38
- Market capitalization: HKD 3.9 trillion (as of September 30, 2026)
- 52-week range: HKD 411.00-683.00 (as of September 30, 2026)
- Sector / Industry: Communication Services / Internet Content and Information
- Next earnings date: November 10, 2026
