Can Sea Ltd.’s (SE) AI Push Make It a Trillion-Dollar Company?

Core Viewpoint - Sea Ltd. is viewed positively by Citadel LLC, with a long-term optimistic outlook despite a recent price target reduction by Bernstein analyst Venugopal Garre from $210 to $185 while maintaining an Outperform rating [1][2]. Group 1: Company Strategy and Vision - Forrest Li, the founder of Sea Ltd., expressed a vision for the company to become a trillion-dollar entity by leveraging artificial intelligence (AI) [2]. - Garre described Li's memo as a "compelling long-term vision anchored by a strong dose of AI optimism," but he raised concerns about short-term growth and profitability pressures as the company pursues these ambitious goals [2][3]. Group 2: Financial Performance and Market Position - Consensus forecasts for Sea Ltd. have improved due to strong execution of its strategy in the first half of the year, although there are doubts about whether this performance can be sustained [3]. - The company is making significant investments in expanding its e-commerce and fintech capabilities, which raises skepticism about the ability to replicate the flawless performance of the first half [3][4]. Group 3: Long-term Investment Perspective - Garre emphasized the importance of strategic investments for gaining market share and maintaining a competitive edge, suggesting that these should take precedence over addressing near-term challenges [4].