Turning Point in the AI War? After Meeting with Management, Wall Street's Take: Tencent is Fighting the "Battle of Midway"

BofA Securities likens Tencent's AI competitive landscape to the "Battle of Midway"—the war is not over, but the balance of power has quietly shifted. The report shows that Tencent is making heavy bets on computing power, accelerating iterations of its Hunyuan model, and advancing both WorkBuddy and Xiaowei on dual tracks. Despite depreciation pressure compressing near-term profits, the current price-to-earnings ratio far from reflects its AI option value. The firm maintains a Buy rating with a target price of HK$780, implying over 77% upside from the current price.