BOCI maintained its Buy rating and HKD655 price target on Tencent, forecasting cash capex of RMB160-180 billion in 2026 as the company balances AI investment with business flexibility.
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BOCI maintains Tencent Buy rating, HKD655 target as AI capex rises
BOCI forecast Tencent's cash capex at RMB160-180 billion in 2026, maintaining a Buy rating and HKD655 price target.
"Tencent is maintaining a prudent investment pace to preserve business flexibility," BOCI said in a report published Thursday.
The broker's projection is contingent on supply chain dynamics for AI infrastructure. Tencent's core businesses, especially gaming, will continue to show resilience in the coming quarters, backed by its evergreen game portfolio and extensive game pipeline, BOCI said.
Tencent shares rose 0.8%, with short selling volume reaching $1.10 billion, or 16.8% of total turnover. The elevated short interest may reflect hedging activity rather than bearish conviction, given the maintained price target implies significant upside from current levels.
The maintained rating comes as investors increasingly focus on Tencent's EPS forecasts and returns on AI investment. BOCI's RMB160-180 billion capex projection for 2026, while substantial, shows the company's disciplined approach to capital allocation. Citi said in a separate note that Tencent's recent share price drop may be due to rotation into AI hardware and panic over game revenue decline.
The maintained Buy rating and target price reinforce confidence in Tencent's ability to balance AI investment with margin discipline. Investors will watch Tencent's upcoming earnings for updated capex guidance and gaming revenue trends.
This article is for informational purposes only and does not constitute investment advice.
