ByteDance's Valuation Surges Above $400 Billion Amid Resilience and Growth

Investors optimistic about TikTok's parent company despite geopolitical concerns

ByteDance Ltd., the parent company of TikTok, has experienced a remarkable rebound in its valuation, exceeding $400 billion, according to recent reports from major investors. This surge highlights the resilience of the Chinese social video giant, which faced the looming threat of a shutdown in the United States. Notably, SoftBank Group Corp.'s Vision Fund revalued ByteDance to over $400 billion in December, driven by optimism surrounding its artificial intelligence (AI) initiative, Doubao. This positive outlook is further echoed by Fidelity Investments and T. Rowe Price Group Inc., with valuations exceeding $410 billion and $450 billion, respectively, based on November filings to the U.S. Securities and Exchange Commission.

SoftBank's valuation strategy notably assigns no value to TikTok's U.S. operations, considering the ongoing discussions regarding potential shutdowns of the popular app in the country. Should TikTok manage to avoid such an outcome, the prospects for further appreciation in ByteDance’s valuation appear promising, as indicated by insiders. This revaluation is also supported by robust revenue growth recorded in the previous year.

While SoftBank declined to provide comments, a representative from ByteDance did not respond to inquiries regarding this development. Fidelity Investments and T. Rowe Price have also refrained from commenting on specific companies or investment decisions concerning individual funds, maintaining a policy of separation between valuation activities and investment management.

This upward adjustment in valuation represents a significant increase from the low point of $275 billion recorded in July 2022. The resurgence in Chinese tech stocks, buoyed by the performance of AI startup DeepSeek and Beijing's more lenient stance on the technology sector, has contributed positively to investor sentiment.

Amidst the geopolitical uncertainties that continue to surround TikTok’s operations in the United States, some investors still express interest in acquiring shares at lower valuations, with offers placing the company’s worth at approximately $240 billion. However, the number of sellers willing to engage at that price appears limited at this time.

For ByteDance’s annual share buyback program in the previous year, the offer price was set at $180 per share, translating to a valuation of around $300 billion. This represents an increase from the $268 billion valuation set for buybacks in 2023.

Despite the focus on the potential risks tied to TikTok’s business in the U.S., the true strength of ByteDance lies in its leading position within the AI sector in China, a factor that remains undervalued by many investors. Doubao, ByteDance’s AI chatbot, boasts 75 million active users, and the company highlights its advanced vision understanding model, which is reportedly 85% cheaper than the industry average, paralleling the innovative efforts of DeepSeek.

As the technology landscape continues to evolve, ByteDance’s future appears promising, marked by a strong growth trajectory and increasing recognition of its capabilities in artificial intelligence.