Citi maintains Tencent 'Buy': Cloud business receives catalysts in the latter half of the year

Citigroup released the latest research report, pointing out that Tencent's latest quarterly earnings call has released positive signals. Apart from the AI narrative, the company's core business remains stable.

Looking at it in detail, Tencent's domestic and overseas gaming businesses have continued their growth momentum, demonstrating strong operational resilience. In the AI and cloud business sectors, which the market is paying more attention to, Citigroup believes that the accelerated volume of domestically produced GPUs in the second half of 2026 could become an important growth catalyst for Tencent's cloud business.

Citigroup stated that it continues to be optimistic about the gradual implementation of Tencent's AI strategy and the sustainable growth prospects for core profits. They maintain a "buy" rating, with the target price slightly adjusted from 783 Hong Kong dollars to 763 Hong Kong dollars.

It is worth noting that the slight downward revision of the target price does not change Citigroup's overall optimistic judgment on Tencent. The acceleration of the domestic computing power replacement process is opening up new imagination space for Tencent Cloud.