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
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