Tencent Holdings Ltd.: The AI giant hidden in plain sight

Research evidence excerpt

Tencent Holdings Ltd.: The AI giant hidden in plain sight

Equity Research

China Technology

15 July 2026

Tencent Holdings Ltd.

The AI giant hidden in plain sight

Earnings PreviewAhead of Q2 results, we preview the quarter but more

importantly we reiterate our bullish view on the company's

strong positioning in AI, which at times has been TCEHY OVERWEIGHT Unchanged

underappreciated by investors. Reiterate OW rating and PT. China Technology POSITIVE

Unchanged

We expect Q2 results to be broadly inline with our and Street estimates. Roughly speaking, Price Target USD 106.00

we expect Games to be up 13-15% yoy, Ads up 20% yoy and FBS up 9% yoy. Overall, revenue and Unchanged

profit in June-Q are estimated to be up about 11% yoy. We highlight that unlike some of other Price (15-Jul-26) USD 61.25

major tech companies in China, Tencent has been delivering profit growth despite its Potential Upside/Downside +73.1%

significant investments in AI (management guidance for AI investments in 2026 is RMB Source: Bloomberg, Barclays Research

36bn, up 100% yoy). This clearly demonstrates the company's dominant positioning in its core

business segments and its operational discipline. Market Cap (USD mn) 556916

Shares Outstanding (mn) 9092.52

We have observed that the company has made AI agents for enterprises a key focus for its AI Free Float (%) N/A

initiatives. With limited compute resources because of lack of access to GPUs, all major tech 52 Wk Avg Daily Volume (mn) 2.9

platform companies in China have to prioritize their various AI projects and make trade-offs. For Dividend Yield (%) 1.10

example, we believe ByteDance has decided early on that the company wants to dominate the Return on Equity TTM (%) 21.69

consumer chatbot space.