Barclays: Tencent may continue to benefit from AI investment, maintains overweight rating on Tencent.

Barclays research report indicates that Tencent remains one of the best-positioned Chinese technology companies, regardless of macroeconomic conditions. Analysts at Barclays attribute Tencent's better-than-expected second-quarter profit margin to the effective use of artificial intelligence to increase productivity and reduce costs. Barclays believes that the short-term opportunities for AI benefits will not be in consumer applications, but rather in internal corporate usage. Increasing spending on investing in AI native applications at Tencent is a positive move, however, monetizing these applications through a ChatGPT-style subscription model will be challenging. Barclays maintains an overweight rating on Tencent, with a target price of $77.00 for the company's American Depositary Receipts unchanged.