Morgan Stanley cuts AI target to HKD 550 for Tencent Holdings stock

Published on 10/20/2026 at 10:26 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

Q2 revenue rose 11.00 percent to RMB 204.80 billion. Tencent Holdings stock trades at EUR 46.85 on October 20, 2026 with a HKD 550 target.

AI investment weighs on targets

Morgan Stanley cut its Tencent target from HKD 650 to HKD 550 on October 19, 2026.
Second-quarter revenue reached RMB 204.80 billion, up 11.00 percent year on year.
Tencent Holdings stock trades at EUR 46.85 at 10:14 a.m. CEST at Lang & Schwarz on October 20, 2026.
Tencent's third-quarter results are scheduled for November 18, 2026.

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

Tencent Holdings Ltd. (KYG875721634) is facing a lower analyst valuation after Morgan Stanley cut its target from HKD 650 to HKD 550 on October 19, 2026, citing heavier artificial intelligence investment. GMT EIGHT reported that the bank kept an Overweight rating while expecting higher AI spending to weigh on near-term profit growth.

Why did the target fall?

The target reduction reflects a change in the earnings balance rather than a deterioration in Tencent's core revenue base. Morgan Stanley expects profit to stay broadly flat in the second half of 2026 and into 2027 as Tencent expands its AI products and infrastructure, according to GMT EIGHT.

Three dates explain the shift

On August 12, 2026, Tencent reported second-quarter revenue of RMB 204.80 billion, up 11.00 percent year on year, while non-IFRS net profit attributable to equity holders rose 9.00 percent to RMB 68.40 billion. The company's official results release also showed capital expenditure of RMB 52.80 billion, up 176.00 percent year on year. Tencent published the figures.

On October 14, 2026, Tencent priced US$1.80 billion and CNY 26.00 billion of notes under its global medium-term note program, according to its investor-relations page. On October 19, 2026, Morgan Stanley reduced its target from HKD 650 to HKD 550 as AI investment increased the expected pressure on margins. These three events connect stronger operating revenue with a more demanding investment cycle.

What comes next for investors?

Tencent's next reporting date is November 18, 2026, when it is scheduled to announce third-quarter results. The timing gives investors a defined test for whether AI spending is translating into revenue while the core businesses continue to expand. The second-quarter release showed marketing services revenue of RMB 43.60 billion, up 22.00 percent year on year, and domestic games revenue of RMB 47.30 billion, up 17.00 percent.

Stock price and reporting date

Tencent Holdings stock was trading at EUR 46.85 at Lang & Schwarz on October 20, 2026 at 10:14 a.m. CEST. The next major company date is November 18, 2026, the scheduled third-quarter results announcement.

The further course of trading is shown by the continuously updated real-time quote of Tencent Holdings stock.