Kuaishou Stock Declines Amid Analyst Concerns Over Future Growth and AI Costs

Shares of the Chinese short-video platform Kuaishou dropped significantly in Hong Kong trading, falling over 13% to HK$45.96 by midday on Thursday. This decline occurred despite the company reporting robust sales growth in its fourth-quarter results, with revenue reaching 39.57 billion yuan, a 12% increase from the previous year. Analysts attributed the stock slump to warnings about mounting pressures on Kuaishou's core advertising and live-streaming businesses, alongside heavy investments in artificial intelligence that are impacting profit margins. Zhang Xueru, an analyst at 86Research, noted that revenue growth is anticipated to slow considerably, leading to a market re-rating. Huatai Securities echoed these concerns, citing factors such as rising subsidies for e-commerce operations that may hinder advertising revenue growth and increased regulatory scrutiny in mainland China affecting live-streaming revenue. The brokerage forecasted Kuaishou's 2026 revenue growth at 4.5%, indicating a notable deceleration. The situation highlights investor apprehension about the company's cautious growth outlook amid technological expenditures and sectoral challenges.