This week’s pullback in $TENCE-To The Moon - Tiger Brokers Online Investing Community - To The Moon

This week’s pullback in $TENCENT(00700)$ and $Alibaba(09988)$ feels more like a reset in expectations than a breakdown in fundamentals. I see the selloff driven mainly by concerns over rising AI capex, while their core businesses—Tencent’s gaming and ads, and Alibaba’s AI-driven cloud—remain strong.

That said, near-term risks are real. Both companies are ramping up investments, which will pressure earnings growth, and Alibaba’s weaker profitability plus losses in its “All Others” segment are a concern. Tencent’s lower buybacks also reduce downside support, so I expect volatility to continue as the market digests overcapex fears.

From a valuation standpoint, the dip is becoming more attractive. Tencent around 16x forward earnings and Alibaba’s long-term AI and cloud momentum look compelling. I see this as a gradual accumulation opportunity rather than a bottom call, and I’d scale in slowly if prices weaken further.

@TigerClub @TigerStars @Tiger_comments @Tiger_SG

Alibaba & Tencent Miss: Can AI Serve as New Growth Engine?

Alibaba is currently engaged in an unprecedented "cash-for-growth" strategy. Nevertheless, the silver lining remains in the cloud: Alibaba Cloud’s revenue growth surged to 37%. Goldman Sachs and Macquarie noted that Tencent is shifting into a capital-intensive "catch-up phase," and cut price target to $700 amid margin pressure. This move is expected to dilute short-term profits and potentially scale back the size of share buybacks. Can Alibaba Cloud’s price increases stem the "bleeding" of profit margins in the next quarter? Is this a value trap, or simply the darkness before the dawn?

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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","winRationPercentage":63.636364,"tradeVolumeEst":0},"themes":[{"themeId":"895fb1e1297846998649daa3a2941004","categoryId":"7a15628ce2174325bddc6229505e0d70","name":"Alibaba & Tencent Miss: Can AI Serve as New Growth Engine?","type":0,"rnLink":"https://laohu8.com/RN?name=RNTheme&page=/theme/detail&rndata={\"themeId\":895fb1e1297846998649daa3a2941004}&rnconfig={\"headerBarHidden\": true}","description":"Alibaba is currently engaged in an unprecedented \"cash-for-growth\" strategy. Nevertheless, the silver lining remains in the cloud: Alibaba Cloud’s revenue growth surged to 37%.\nGoldman Sachs and Macquarie noted that Tencent is shifting into a capital-intensive \"catch-up phase,\" and cut price target to $700 amid margin pressure. 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I see the selloff driven mainly by concerns over rising AI capex, while their core businesses—Tencent’s gaming and ads, and Alibaba’s AI-driven cloud—remain strong.\n<p></p>\n<p>That said, near-term risks are real. Both companies are ramping up investments, which will pressure earnings growth, and Alibaba’s weaker profitability plus losses in its “All Others” segment are a concern. Tencent’s lower buybacks also reduce downside support, so I expect volatility to continue as the market digests overcapex fears.</p>\n<p>From a valuation standpoint, the dip is becoming more attractive. Tencent around 16x forward earnings and Alibaba’s long-term AI and cloud momentum look compelling. I see this as a gradual accumulation opportunity rather than a bottom call, and I’d scale in slowly if prices weaken further.</p>\n<p><a href=\"https://ttm.financial/U/3527667671414981\"> @TigerClub </a><a href=\"https://ttm.financial/U/9000000000000149\"> @TigerStars </a><a href=\"https://ttm.financial/U/3501196737273098\"> @Tiger_comments </a><a href=\"https://ttm.financial/U/4106547232749330\"> @Tiger_SG </a><t-t type=\"img\" src=\"https://community-static.tradeup.com/news/6ae7f5b69235701875a8854186dd25c6\"></t-t></p></body></html>","htmlText":"<html><head></head><body>This week’s pullback in <a href=\"https://ttm.financial/S/00700\"> $TENCENT(00700)$ </a> and <a href=\"https://ttm.financial/S/09988\"> $Alibaba(09988)$ </a> feels more like a reset in expectations than a breakdown in fundamentals. I see the selloff driven mainly by concerns over rising AI capex, while their core businesses—Tencent’s gaming and ads, and Alibaba’s AI-driven cloud—remain strong.\n<p></p>\n<p>That said, near-term risks are real. Both companies are ramping up investments, which will pressure earnings growth, and Alibaba’s weaker profitability plus losses in its “All Others” segment are a concern. Tencent’s lower buybacks also reduce downside support, so I expect volatility to continue as the market digests overcapex fears.</p>\n<p>From a valuation standpoint, the dip is becoming more attractive. Tencent around 16x forward earnings and Alibaba’s long-term AI and cloud momentum look compelling. I see this as a gradual accumulation opportunity rather than a bottom call, and I’d scale in slowly if prices weaken further.</p>\n<p><a href=\"https://ttm.financial/U/3527667671414981\"> @TigerClub </a><a href=\"https://ttm.financial/U/9000000000000149\"> @TigerStars </a><a href=\"https://ttm.financial/U/3501196737273098\"> @Tiger_comments </a><a href=\"https://ttm.financial/U/4106547232749330\"> @Tiger_SG </a><t-t type=\"img\" src=\"https://community-static.tradeup.com/news/6ae7f5b69235701875a8854186dd25c6\"></t-t></p></body></html>","text":"This week’s pullback in $TENCENT(00700)$ and $Alibaba(09988)$ feels more like a reset in expectations than a breakdown in fundamentals. I see the selloff driven mainly by concerns over rising AI capex, while their core businesses—Tencent’s gaming and ads, and Alibaba’s AI-driven cloud—remain strong. That said, near-term risks are real. 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