HONG KONG -- Investors piled into Chinese internet giant Tencent Holdings, sending its shares to an all-time high in Hong Kong Friday, amid growing optimism that virtual reality and advertising revenue will accelerate Tencent's future growth.
The stock extended gains for the third day to rewrite the previous post-split record high marked on Sept. 6.
Buying further accelerated in the afternoon as investors turned increasingly bullish about the company's outlook, sending the stock as high as 220.800 Hong Kong dollars at one point, up HK$6.200, or 2.89%, from Thursday.
Tencent's market capitalization reached HK$2.06 trillion ($265 billion) during morning trading, making it the most valuable company on the Hong Kong stock exchange, according to a report by the online edition of Hong Kong's Oriental Daily News.
But Tencent has yet to beat its archrival Alibaba Group Holding, a Chinese e-commerce giant, in terms of market cap. On Thursday, Alibaba was valued at over $270 billion, thanks in part to a buoyant U.S. stock market.
On Friday, a Tencent official was quoted by the Hong Kong Economic Journal as saying the company is working to establish an open platform for virtual reality and to develop products incorporating artificial intelligence.
The news boosted investors' hopes that Tencent's ongoing efforts to adopt AI into its games will finally make some progress and drive its future growth.
On Wednesday, Tencent said its mobile messaging subsidiary, WeChat, will offer a new ad service for its registered users. The new service is expected to allow for a more flexible distribution of online ads at lower costs, stoking hopes among investors that it will help widen WeChat's user base and boost ad revenue.