Hedge funds are buying these two big tech stocks while selling two rivals
Investing.com - Morgan Stanley has reiterated its Overweight rating and $27.50 price target on Tencent Music Entertainment Group (NYSE:TME), citing the company’s strategic investments in concerts and merchandise. The $29.9 billion market cap entertainment company has delivered an impressive 92.34% return over the past year, though shares have pulled back 7.57% in the past week.
The firm believes these investments represent "the right direction in the long term" for TME, despite potential near-term margin pressure that "will require a bit more patience" from investors.
Morgan Stanley has adjusted its forecasts for TME, raising its 2025 net profit estimate by 2% following a profit beat, while trimming 2026 and 2027 net profit projections by 2% to Rmb10.8 billion and Rmb12.3 billion respectively, due to higher planned investments.
The firm’s analysis suggests that competition "looks not to be an issue for TME" at present, reinforcing confidence in the company’s market position.
Morgan Stanley maintained its price target at $27.50 after rolling its discounted cash flow model forward to September 2027, expressing continued optimism that TME’s investments will "unlock upside from the high-end music market and generate returns in the long run."
In other recent news, Tencent Music Entertainment Group reported its third-quarter earnings for 2025, surpassing analyst expectations. The company achieved an earnings per share of $1.54, exceeding the forecasted $1.52. Revenue reached $8.46 billion, which was above the anticipated $8.23 billion. These results have reinforced positive sentiment around the company’s financial performance. Additionally, Macquarie maintained its Outperform rating for Tencent Music, although it lowered its price target from $29.80 to $28.30. The research firm highlighted the company’s "solid" third-quarter performance, with non-subscription music revenue surpassing both its own and the broader market’s expectations. These developments indicate ongoing momentum in Tencent Music’s business. Investors are keeping a close watch on the company’s future performance.
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