0319 GMT - Kuaishou's AI investments could further benefit its ad revenue in the long run, Morningstar analyst Ivan Su says in a research note. Despite Kuaishou's 2Q earnings topping expectations, Su says the outperformance was mainly driven by e-commerce and its AI video-generation tool Kling, or segments with lower long-term visibility. The AI investments drove a low, single-digit increase in 2Q ad revenue. "While the pace trails Tencent's, we still see a long runway for continued improvement," Su says. Kuaishou's special dividend of HK$2 billion is a positive signal and reflects management's intent to return excess net cash to shareholders, he adds, noting further upside to Kuaishou's share valuation should come from Kling, which is seeing monetization remain in early stages. Kuaishou's shares are last 3.9% higher at HK$77.80. (sherry.qin@wsj.com)

(END) Dow Jones Newswires

August 24, 2025 23:19 ET (03:19 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.