Tencent Holdings closed Friday's session down 1.97% at HK$547.50, as investors weighed the company's aggressive push into artificial intelligence against broader sector headwinds. The tech giant has launched a promotional campaign worth 1 billion yuan (approximately $144 million) to attract users to its Yuanbao AI assistant, offering digital cash gifts commonly associated with Lunar New Year celebrations.
However, the initiative faces internal constraints. WeChat, Tencent's ubiquitous messaging platform, has reportedly limited the sharing of promotional links for these AI cash rewards in private and group chats. This restriction affects not only Tencent's own Yuanbao but also campaigns by rivals like Alibaba's Qianwen assistant, creating a complex competitive landscape.
The broader market context remains challenging. The Hang Seng TECH Index declined 1.11% to 5,346.20, reflecting investor caution. Analysts note a spillover of nervous sentiment from U.S. tech markets, where concerns over capital expenditure for AI infrastructure have prompted some profit-taking. "Investors are de-risking and locking in gains," observed eToro market analyst Zavier Wong.
Tencent's strategic dilemma is clear: substantial cash outlays for user acquisition may yield only short-term engagement spikes, especially if distribution channels like WeChat remain constrained. The company's board is scheduled to meet on March 18 to approve annual results for the 2025 fiscal year and consider a final dividend declaration.
Market attention now turns to Monday's opening bell and the upcoming release of China's January consumer price index data on February 11, which could influence policy expectations for the tech sector. Furthermore, Hong Kong's market will observe a Lunar New Year holiday from February 17 to 19, potentially affecting trading liquidity.
