Morgan Stanley cuts Tencent target to HKD 650 for Tencent Holdings stock
Published on 10/21/2026 at 10:08 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWSAI investment and earnings dates
- Morgan Stanley cut its Tencent target from HKD 735 to HKD 650 on October 21, 2026.
- Tencent reported RMB 204.8 billion of second-quarter revenue, up 11 percent, on August 12, 2026.
- Tencent Holdings stock was trading at EUR 44.88 at 10:03 a.m. CEST at Lang & Schwarz on October 21, 2026.
Tencent Holdings stock was trading at EUR 44.88 at Lang & Schwarz on October 21, 2026, at 10:03 a.m. CEST. GMT Eight reported that Morgan Stanley cut its Tencent target from HKD 735 to HKD 650 on October 21, 2026, while reiterating an overweight rating.
Target cuts put AI spending first
The change reflects pressure from Tencent's expanding investment in basic models, new artificial intelligence products and graphics processors. Morgan Stanley said the spending could weigh on short-term profit margins, while its report revised 2026 and 2027 operating profit estimates under non-IFRS accounting down by 6 percent to 7 percent.
The same report said Tencent invested RMB 18.0 billion in new AI products in 2025 and expects that figure to more than double in 2026. The market question is therefore moving from revenue growth to the pace at which AI infrastructure can become a profit contributor.
What does AI spending change?
Tencent's latest reported quarter provides the operating baseline. In its release dated August 12, 2026, Tencent said second-quarter 2026 revenue rose 11 percent year over year to RMB 204.8 billion, while non-IFRS operating profit increased 9 percent to RMB 75.6 billion. Capital expenditure reached RMB 52.8 billion, up 176 percent year over year.
The results also show where the funding capacity comes from. Marketing Services revenue rose 22 percent to RMB 43.6 billion in the second quarter, and FinTech and Business Services revenue increased 9 percent to RMB 60.3 billion, according to the same release.
Three dated signals for investors
On August 12, 2026, Tencent reported RMB 204.8 billion of second-quarter revenue. On October 20, 2026, Longbridge reported that Nomura cut its target from HKD 695 to HKD 659 while retaining a Buy rating. On October 21, 2026, Morgan Stanley cut its target from HKD 735 to HKD 650.
Results date is November 18
Tencent's next scheduled reporting date is November 18, 2026, at 8:00 p.m. New York time, according to the company's investor-relations calendar. The third-quarter results will test whether the second-quarter revenue momentum can absorb the higher AI investment burden.
Hong Kong valuation remains central
The Hong Kong quotation stood at HKD 394.80 at 3:51 p.m. HKT on October 21, 2026, against a 52-week range of HKD 394.60 to HKD 664.00. Tencent's market capitalization was HKD 3.6 trillion at that timestamp, keeping the Hong Kong listing as the central valuation reference for the company.
Tencent Holdings stock was trading at EUR 44.88 at Lang & Schwarz on October 21, 2026, at 10:03 a.m. CEST. The further course of trading is shown by the continuously updated real-time quote of Tencent Holdings stock.
Tencent Holdings stock facts
- Company: Tencent Holdings Limited
- ISIN: KYG875721634
- Ticker: 0700
- Primary exchange: HKEX
- Price Lang & Schwarz (as of October 21, 2026, 10:03 a.m. CEST): EUR 44.88
- Sector / Industry: Communication Services / Internet Content and Information
- Market capitalization: HKD 3.6 trillion (as of October 21, 2026)
- 52-week range: HKD 394.60-HKD 664.00 (as of October 21, 2026)
Market context: Latest market reports.
