After a strong earnings report, Tencent's consensus target price has been significantly raised, with the optimism of investment banks only second to the launch of DeepSeek

Wallstreetcn
2025.08.15 06:36
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More than twenty analysts are collectively optimistic about Tencent, raising the consensus target price to HKD 688, indicating a potential increase of nearly 16%, with Goldman Sachs setting an even higher target price of HKD 701. This round of optimism is second only to the surge after DeepSeek's launch, marking the second highest in five years. Analysts believe that AI is becoming the core engine of Tencent's high-quality growth, and its commercialization potential has yet to be fully realized

A strong quarterly financial report is making Tencent Holdings Limited a darling of the capital market once again.

On August 15th, according to Bloomberg, since the release of its financial report on Wednesday, more than twenty analysts have raised their target price for Tencent, with the current consensus target price rising over 5% to HKD 688. Based on last Friday's trading price of HKD 594.50, the new consensus target price implies nearly a 16% potential upside within the next 12 months.

The increase in this wave of optimism is second only to the market enthusiasm triggered by news related to the AI startup DeepSeek in March of this year, marking the second-largest increase in target prices following Tencent's financial report in the past five years. Currently, at least 16 brokerages predict that Tencent's stock price is likely to break its historical high of around HKD 700 set in 2021.

Wallstreetcn wrote that Goldman Sachs raised Tencent's target price from HKD 658 to HKD 701, while also increasing the company's revenue and earnings per share forecasts for 2025 to 2027 by 1-6%. Analysts generally believe that Tencent remains one of the most visible and sustainable growth prospects among China's internet giants.

Behind this optimism is Tencent's performance exceeding expectations. The financial report shows that its second-quarter revenue grew by 15% year-on-year to RMB 184.5 billion, with major business segments such as advertising achieving double-digit growth, which the company attributes to AI-driven efficiency improvements. Analysts summarized several key highlights:

  • AI as a growth engine: AI technology is no longer just a concept; it has practically enhanced the efficiency of advertising and gaming businesses, leading to significant revenue growth.
  • Huge potential in advertising: The commercialization of Tencent's advertising businesses, such as video accounts, is still low, indicating long-term growth potential in the future.
  • More stable gaming business: With new blockbuster games and a "platformization" strategy, Tencent's gaming business growth prospects are more stable.

Looking ahead, Tencent's growth will be primarily driven by new games and artificial intelligence. The highly anticipated new mobile game "Valorant Mobile" is set to be released soon, while the AI technology validated by the financial report will serve as a core competitive advantage, continuously providing long-term growth momentum for various business segments.

However, Goldman Sachs also pointed out potential risks, including intensified competition in the advertising industry, delays in the release or approval of new games, and the impact of the macroeconomic environment on fintech and cloud businesses

Tencent Financial Report, Understand it at a Glance!
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