0423 GMT - Tencent's shares look cheap after a recent correction, Morningstar analyst Ivan Su says in a research note. Tencent's shares have fallen around 30% so far this year as the market punishes Chinese internet names amid uncertainty around AI, he says. Investors are particularly worried about Tencent's elevated AI expenditure and its AI products falling behind domestic peers, he says. "The reaction is overblown," the analyst says, noting AI has already strengthened Tencent's core businesses. Su notes that the discount looks even harder to justify against current fundamentals as Tencent's flagship games continue to dominate China's top-grossing charts while video accounts unlock high-margin ad revenue. Shares last ended 2.3% higher at HK$429.80. (sherry.qin@wsj.com)
(END) Dow Jones Newswires
July 01, 2026 00:23 ET (04:23 GMT)
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