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<Research>Nomura Cuts TENCENT's TP to HKD727, Trims NP Forecasts Due to Increased AI Investment
TENCENT (00700.HK) plans to further ramp up investment in new AI products this year, with the budget more than doubling to over RMB36 billion, equivalent to more than 4% of the mar...
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<Research>Nomura Cuts TENCENT's TP to HKD727, Trims NP Forecasts Due to Increased AI Investment
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TENCENT (00700.HK)  -7.400 (-1.490%)    Short selling $1.08B; Ratio 47.391%   plans to further ramp up investment in new AI products this year, with the budget more than doubling to over RMB36 billion, equivalent to more than 4% of the market's revenue forecast for 2026, according to Nomura's research report.

The company's cloud business strategy is also undergoing a shift. In Nomura's estimation, its cloud revenue growth will accelerate from 16% last year to 20% this year.

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Due to increased AI investment, Nomura expects TENCENT's non-GAAP operating profit margin for 2026 to decline by 0.4 ppts to 36.9%, resulting in a slowdown in corresponding operating profit growth to 9%, compared to a revenue growth forecast of 10%.

Nomura has also trimmed its 2026-27 non-GAAP net profit forecasts for TENCENT by 3% and 1%, respectively, with net profit expected to grow by 8% during the period. TENCENT's rating remains Buy, but its target price has dropped from HKD775 to HKD727.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-04-02 16:25.)

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