On November 17, Nomura issued a research report indicating that Tencent (00700.HK) demonstrated a robust overall performance in the third quarter. During the subsequent conference call, Tencent's management disclosed that the company is currently grappling with supply limitations for AI chips. This has prompted a downward adjustment of its capital expenditure forecast for fiscal year 2025. The revised projection is anticipated to be lower than the previously estimated low double-digit percentage of its annual revenue, yet still surpassing last year's figure of RMB 77 billion.

Nomura highlighted that the ongoing chip shortage will persist in exerting a substantial influence on Tencent's cloud business, impeding its growth trajectory. This is because computing power represents one of the most sought-after services among enterprise users deploying large language models. Nevertheless, Tencent's management assured that its two premium AI assets—Yuanbao and Hunyuan large models—remain unaffected by the prevailing supply constraints.

Nomura posited that, in comparison to its counterparts ByteDance and Alibaba (09988.HK), Tencent might have underinvested in AI infrastructure and large language models over the past few years. Despite this observation, Nomura retains a 'Buy' recommendation on Tencent and has increased its target price from HK$757 to HK$775.