0920 GMT - Tencent's continuous AI investments in its consumer-facing products could have some impact on its margins, Barclays analysts say in a research note. In the past quarters, Tencent has been growing its gross profits and operating profits at much faster rates than its revenue, as the company targets higher-margin businesses and operational efficiency, they say. But the gap between operating profit growth and revenue growth will likely narrow in 2Q and 2H, they say. However, the analysts think these investments are "absolutely necessary to stay ahead in the AI race in China." Barclays maintains an overweight call on Tencent's ADRs, but lowers its target price to US$77.00 from US$90.00. ADRs last ended at US$66.27. (sherry.qin@wsj.com)

(END) Dow Jones Newswires

July 18, 2025 05:20 ET (09:20 GMT)

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