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Investing.com - Morgan Stanley has raised its price target on Tencent Holdings (HK:0700) (OTC:TCEHY) to HK$700.00 from HK$650.00 while maintaining an Overweight rating on the stock.
The upgrade follows what Morgan Stanley described as an "all-round beat" in Tencent’s second-quarter results, which the firm attributes to successful artificial intelligence deployment across all business lines.
Tencent has maintained its previous capital expenditure guidance at a low teens share of full-year 2025 revenue. Morgan Stanley estimates this at approximately Rmb97 billion, noting the company is largely on track with Rmb47 billion spent year-to-date.
The investment bank expects second-half capital expenditure to accelerate with the resumption of H2 sales to China, following supply chain constraints experienced in the second quarter.
According to Morgan Stanley, Tencent management suggested tracking AI effectiveness through four metrics: existing business growth with AI as a driver, quality of the Hunyuan model, engagement of AI-enabled applications, and innovative products such as AI agents.
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