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Investing.com - Jefferies raised its price target on Tencent Holdings (HK:700) (OTC:TCEHY), the $682 billion interactive media giant, to HK$706.00 from HK$665.00 on Thursday, while maintaining a Buy rating following the company’s second-quarter financial performance. The stock is currently trading near its 52-week high, having delivered an impressive 46% return year-to-date.
The investment firm cited Tencent’s "impressive 2Q results" as the primary reason for the price target increase, highlighting strong performance across multiple business segments. According to InvestingPro data, the company maintains a "GREAT" financial health score, with robust revenue growth of 10% and an attractive gross margin of 54%.
In the marketing services segment, Jefferies noted that revenue growth was "driven by multiple levers, backed by AI adtech upgrades and closed-loop ad activities," indicating technological improvements in Tencent’s advertising capabilities.
For the gaming division, Jefferies observed that Tencent’s "portfolio strategy with pursuit of best-in-class titles sustains growth," with international games delivering unexpected positive results during the quarter.
The firm also highlighted strength in Tencent’s Fintech and Business Services (FBS) segment, where "payment volume drives growth and broad-based offerings are provided for cloud services," concluding that the company’s "high-quality growth is intact."
In other recent news, Citi analysts have maintained a Buy rating on Tencent Holdings with a price target of HK$695. This decision follows Tencent’s introduction of QBot on its QQ Browser, which is being recognized as a major advancement in the company’s AI capabilities. The new AI browser aims to enhance user experience by integrating credible data sources and offering various AI-driven functions such as search, browsing, writing, learning, and office tasks. QBot is expected to be a significant addition to Tencent’s AI tools, which already include Yuanbao and ima. Analysts at Citi believe that QBot could become a mainstream entry point for users, leveraging Tencent’s large active user base. The QQ Browser had 433 million monthly and 97 million daily active users as of April 2025. This integration of AI functionalities is anticipated to boost user adoption and facilitate a transition to AI-powered interactions.
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