Tencent (SEHK:700) Valuation Check After Gaming Surge and Nvidia Cloud Workaround Boost Growth Prospects

Tencent Holdings (SEHK:700) is back in focus after China’s video game industry hit a new revenue high, while the company quietly tapped Japanese cloud partners to access Nvidia Blackwell chips despite ongoing US export controls.

See our latest analysis for Tencent Holdings.

Those themes are already feeding into sentiment, with the share price up strongly on a year to date basis and a solid one year total shareholder return suggesting momentum is still broadly constructive rather than fading.

If Tencent’s positioning in AI gaming and cloud has you thinking bigger, this could be a good moment to explore other high growth tech and AI stocks that are grabbing investor attention.

With Tencent trading at a discount to analyst targets and still delivering double digit earnings growth, investors face a familiar dilemma: is this still an undervalued AI and gaming champion, or is the market already pricing in its next leg of growth?

Most Popular Narrative Narrative: 24.5% Undervalued

According to kapirey, the narrative fair value of HK$813.65 sits meaningfully above Tencent’s last close at HK$614, framing a sizable upside gap.

WeixinVideo Accounts, Mini Games and Weixin Search enhance user value by creating seamless connections with products, services and content while presenting exciting revenue opportunities. Generating high margin revenue streams from own traffic, with platform costs already paid for.

Read the complete narrative.

Curious how always on social traffic, expanding gaming IP and scaled fintech are all stitched into one aggressive growth and margin playbook? The narrative reveals the blueprint.

Result: Fair Value of $813.65 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, shifting regulation around generative AI and Washington’s decision to add Tencent to its Chinese military companies blacklist could yet complicate that bullish trajectory.

Find out about the key risks to this Tencent Holdings narrative.

Build Your Own Tencent Holdings Narrative

If you see Tencent’s story differently, or simply want to test your own assumptions against the numbers, you can build a fresh narrative in just a few minutes, Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Tencent Holdings.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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