Bilibili (BILI) is expected to gain from improving "visibility" in its game pipeline, rising benefits from artificial intelligence adoption and a more attractive valuation following a recent share price pullback, Morgan Stanley said in a note Monday.
Bilibili's gaming segment is poised for a new "upcycle" in the second half of 2026, supported by three upcoming titles expected to drive revenue growth, Morgan Stanley said, projecting 2027 game revenue of 7.8 billion Chinese yuan ($1.1 billion), above the market consensus of 6.8 billion yuan, noting that contributions from new releases are not fully reflected in current expectations.
The firm expects the largest impact from "Romance of the Three Kingdoms: Wangdaotianxia," followed by "NCard" and "Lumi Master," with the flagship title expected to launch by Q4 of 2026.
The investment bank highlighted multiple AI-driven tailwinds, including improved user engagement through better content recommendations, "higher creator efficiency" via AI tools, "lower costs" from AI-assisted development, and increasing advertising demand from AI-related businesses, the report said.
While slightly lowering 2026 revenue forecasts due to "weaker live broadcasting," the investment bank raised projections for 2027 and 2028, citing stronger operating leverage and new game contributions, according to the report.
Morgan Stanley upgraded Bilibili to overweight from equal weight and raised its price target to $31 from $25.
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