Tencent Holdings stock falls 2.27 percent as Morgan Stanley cuts its target

Published on 10/04/2026 at 13:44 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

Tencent Holdings stock was last at HKD 421.20 on October 2, 2026, after a 2.27 percent daily decline. Q2 revenue rose 11 percent to RMB 204.8 billion.

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

Tencent Holdings stock (ISIN KYG875721634) was last at HKD 421.20 on the Hong Kong Stock Exchange on October 2, 2026, at 4:08 p.m. HKT, down 2.27 percent from the prior close of HKD 431. Morgan Stanley's September 29, 2026 target reduction puts short-term AI investment pressure at the center of the valuation debate.

Morgan Stanley cuts target to HKD 650

According to GMT EIGHT, Morgan Stanley lowered its Tencent target from HKD 735 to HKD 650 on September 29, 2026. The report said higher spending on basic models, AI products and GPUs could weigh on profit margins in the short term, while its 2026 and 2027 non-IFRS operating-profit estimates fell 6 percent to 7 percent.

Q2 revenue rises 11 percent

Tencent's latest reported quarter delivered RMB 204.8 billion in revenue, up 11 percent year over year, while non-IFRS net profit attributable to equity holders rose 9 percent to RMB 68.4 billion, according to the Yahoo Finance transcript of the August 12, 2026 results webinar. Operating profit excluding new AI products increased 19 percent to RMB 86.1 billion in Q2/2026.

The investment cost is visible in the same quarter. Tencent reported operating capital expenditure of RMB 51.8 billion, up 190 percent year over year, while free cash flow was negative RMB 13.8 billion after AI infrastructure spending and related prepayments.

Consensus target stands above HKD 663.98

Investing.com lists a Strong Buy consensus from 44 analysts and an average 12-month target of HKD 663.98. That average target lies 57.64 percent above the HKD 421.20 reference price, leaving the market to weigh AI spending against Tencent's established earnings base.

Stock sits 2.51 percent above yearly low

Tencent's market capitalization was HKD 3.8 trillion on October 2, 2026, with volume of 19,098,745 shares. The 52-week range was HKD 411 to HKD 682.50, placing the reference price 2.51 percent above the low.