Kuaishou Technology (01024.HK) saw its shares plunge 5.28% in intraday trading, following the release of its latest earnings report which revealed the company's slowest quarterly sales growth since its 2021 listing. The sharp decline comes as the company shifts its focus towards artificial intelligence (AI) as a key driver for future growth.
In response to the slowdown, Kuaishou is betting heavily on AI to boost its platform's value and achieve traffic growth. The company introduced Kling AI, a new video-generation tool, which has already generated over 100 million yuan ($13.8 million) in cumulative revenue through February since its launch late last year. Chairman Cheng Yixiao expressed optimism about Kling AI's potential, projecting "significant revenue growth" for the tool in the coming year.
Despite the current stock slump, Kuaishou remains optimistic about its future prospects. The company reported that AI-generated content has increased both time spent and user engagement on its platform, making it more attractive for marketing spending. However, analysts from Bloomberg Intelligence caution that while Kuaishou is well-positioned for profitability in 2025, economic headwinds, increased R&D investment in AI, and intense e-commerce competition pose risks to margins. The company's fourth-quarter revenue rose 8.7% to 35.4 billion yuan, meeting analyst expectations, but investors seem wary of the slower growth rate and the uncertainties surrounding the AI-driven strategy.
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