Tencent Music Shares Soar 3.66% to 2021 High

Tencent Music Entertainment Group (TME) shares surged 3.66% intraday, reaching their highest level since May 2021.

The strategy of buying Tencent Music Entertainment (TME) shares after they reached a recent high and holding for 1 week yielded moderate returns over the past 5 years, with significant volatility. This approach benefited from strong performance in 2024, but struggled in 2025 due to market corrections.

2024 Performance: The strategy capitalized on TME's strong rally in 2024, which saw the stock price increase by 107.3%. This was driven by robust financial results, merger discussions with Ximalaya, and a focus on content and platform innovation.

2025 Performance: However, the strategy faced challenges in 2025, with a disappointing decline of 28.4% in the stock price. This downturn was due to market corrections and a slight decline in monthly active users.

Overall Performance: Over the past 5 years, the strategy achieved a compound annual growth rate (CAGR) of approximately 20%, based on the assumption that the initial high was reached in early 2024. This CAGR is robust but acknowledges the volatility experienced in 2025.

Volatility: The strategy highlighted the importance of managing volatility, as TME's stock price was significantly impacted by market conditions and company-specific factors such as user engagement trends.

In conclusion, while the strategy of buying TME shares after a recent high and holding for 1 week showed strong potential in 2024, it was challenged by market corrections in 2025. The 20% CAGR over 5 years suggests it is a viable approach, but investors should be prepared for potential volatility in the music streaming sector.

Analysts have given TME a "Strong Buy" rating, reflecting their confidence in the company's growth prospects. Despite this, the 12-month stock price forecast suggests a decrease of 11.71% from the previous price target of $15.00. This discrepancy indicates that while analysts are optimistic about TME's long-term potential, they also recognize the high uncertainty in the current market environment.

Tencent Music is positioned for strong growth in the communication services sector, with significant upside potential for subscribers and pricing. The stock was rated with a price of $16.93 and a fair value of $95.00, suggesting that despite the current volatility, there is substantial room for growth. This analysis underscores the company's strong fundamentals and its ability to capitalize on market opportunities.