Tencent reported second-quarter 2026 revenue of 204.79 billion yuan, up 11% and slightly above expectations, as domestic gaming and advertising offset pressure from a sharp increase in AI spending. Profit attributable to equity holders rose 0.7% to 56.022 billion yuan, non-IFRS profit attributable to shareholders increased 9% to 68.4 billion yuan, capital expenditure jumped 176% to 52.78 billion yuan and free cash flow turned negative 13.8 billion yuan. After the results, JPMorgan kept an Overweight rating and HK$690 target, Morgan Stanley kept Overweight but cut its target to HK$550 on margin concerns, and Citi raised its target to HK$765, highlighting a market split over how quickly Tencent's Hunyuan and related AI products can translate investment into earnings.