Tencent Music Entertainment Group's stock plummeted 5.01% during intraday trading on Wednesday, extending recent losses for the music streaming service.

The sharp decline follows multiple analyst rating downgrades and price target cuts. Benchmark downgraded the stock to "hold" from "buy," while J.P.Morgan cut its rating to "neutral" from "overweight" and slashed its price target to $12 from $30. Analysts cited intensifying competition weighing on subscription growth and structural challenges from rapid shifts in content creation and consumption, accelerated by AI adoption.

Additionally, the company's annual guidance missed consensus estimates, with particular concern around AI-generated music disrupting the traditional subscription model. Analysts noted that AI could change casual users' listening habits and threaten key metrics like user traffic and paid subscriber conversion, especially in China where short-video platforms challenge traditional music streaming.