Tencent (TCEHY) (HK:0700) has recently restructured its AI product portfolio, consolidating several teams and products under its Cloud and Smart Industries Group (CSIG). These changes reflect the company’s focus on large-scale AI models and integrating them across its products to strengthen its position in the AI industry.
The Chinese tech giant has moved several key apps, such as QQ Browser, keyboard tool Sogou Pinyin, and learning assistant Ima under its CSIG unit. These products were previously part of the Platform & Content Group (PCG). This move follows the earlier transfer of its AI chatbot Yuanbao to the CSIG segment.
It is worth noting that this restructuring reflects Tencent’s shift in AI strategy to improve product experience and user feedback. By consolidating its AI products, Tencent aims to enhance its AI capabilities, better allocate resources, and expand its global reach.
Tencent Undertakes Dual-Engine AI Strategy
Tencent is adopting a “dual-engine” approach, supporting both its Hunyuan reasoning model and DeepSeek’s R1 model across its product ecosystem. This includes Yuanbao, ima, QQ Browser, Tencent Docs, Tencent Maps, and QQ Music.
Earlier this month, WeChat Search introduced an AI search feature powered by the DeepSeek-R1 model. At the same time, the Sogou Input Method is currently exploring similar integration options.
With this strategy, Tencent aims to enhance its AI product capabilities by using the strengths of both models. Tencent’s in-house Hunyuan reasoning model provides powerful and professional responses, while DeepSeek’s R1 model, is known for its human-like interactions and adds depth and versatility.
How Has TCEHY’s Stock Price Performed YTD
Tencent stock has seen a strong performance year-to-date, having gained over 24%. The company’s AI advancements, particularly the integration of WeChat’s DeepSeek model, have fueled investor optimism. Looking ahead, the company’s recent restructuring and focus on large language models position it well for growth in the AI industry.
Is TCEHY a Good Stock to Buy?
Turning to Wall Street, TCEHY stock has a Moderate Buy consensus rating based on a single Buy rating assigned by Barclays analyst Jiong Shao in the past three months. Shao’s price target of $66 on Tencent stock, implies 1.06% downside potential from current levels.
