---
title: "Morgan Stanley lowers Tencent's target price to HKD 650, stating that AI investments are expected to weigh on profit margins in the short term"
type: "News"
locale: "zh-CN"
url: "https://longbridge.com/zh-CN/news/279703380.md"
description: "Morgan Stanley has lowered its target price for Tencent to HKD 650, citing that the company's investments in artificial intelligence will impact profit margins in the short term. Tencent's stock price fell more than 5% at one point, marking the largest decline in six weeks. Analysts expect Tencent's revenue to grow by 10.8% and operating profit to increase by 5% in 2026. Despite facing pressure in the short term, AI investments are expected to bring new growth opportunities in the long run"
datetime: "2026-03-19T01:50:37.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/279703380.md)
  - [en](https://longbridge.com/en/news/279703380.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/279703380.md)
---

> 支持的语言: [English](https://longbridge.com/en/news/279703380.md) | [繁體中文](https://longbridge.com/zh-HK/news/279703380.md)


# Morgan Stanley lowers Tencent's target price to HKD 650, stating that AI investments are expected to weigh on profit margins in the short term

Tencent Holdings' Hong Kong stock once fell more than 5%, marking the largest intraday drop in over six weeks. Morgan Stanley stated that Tencent is increasing its investments in foundational models (Hunyuan 3.0), Yuanbao, and other new artificial intelligence products and GPUs, which will pressure the company's profit margins in the short term; it lowered the company's target price from HKD 735 to HKD 650.

Morgan Stanley analysts, including Gary Yu, pointed out in the report that they have reduced Tencent's operating profit for 2026 and 2027 under non-International Financial Reporting Standards by 6%-7% to reflect higher AI-related investments. Tencent's revenue is expected to grow by 10.8% in 2026, with operating profit under non-International Financial Reporting Standards growing by 5%. Tencent is investing RMB 18 billion in new AI products in 2025, which is expected to more than double in 2026.

In the long run, Tencent's investments in the AI field are expected to unlock new growth opportunities. The overweight rating on the stock is reiterated

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