A Bank of America Securities research report stated that Tencent Holdings offers the best investment opportunity within China's internet industry, including AI-driven growth potential, a stable competitive landscape, and attractive shareholder returns at attractive valuations. In the AI sector, the bank sees Tencent as a key beneficiary of AI applications and monetization in China, with the potential for accelerated growth in advertising and cloud revenue, demonstrating the benefits of AI technology to its core business. The bank also believes that continued integration and experimentation of AI capabilities into WeChat (for example, through AI agents that directly recommend services and products within WeChat) could drive a re-rating of the stock price in the medium term. The bank reiterated its Buy rating on Tencent and raised its target price from HK$690 to HK$780, shifting its valuation forecast from discounted cash flow to a comprehensive approach, resulting in adjusted price-to-earnings ratios of 23x and 20.6x in 2026 and 2027, respectively. Bank of America Securities expects Tencent to achieve 13% annual revenue growth and 18% annual adjusted operating profit growth. By business unit, the gaming business is expected to grow 18% year-over-year in the third quarter of fiscal 2025, even against a higher base. Advertising revenue is expected to grow 20% annually. Cloud revenue growth is likely to accelerate due to continued investment in AI infrastructure, while fintech is poised for a continued recovery. Fintech and enterprise services revenue is expected to grow 11% annually. Regarding profitability, margins are expected to remain stable in the near term, despite the potential for higher depreciation expenses going forward.