Tencent beats estimates as AI propels growth
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The news: China’s Tencent reported strong earnings in the second quarter, as the tech behemoth’s AI advancements boosted earnings in its gaming and marketing businesses.
The numbers: Tencent posted a 15% jump in Q2 revenue at 184.5 billion yuan ($39.24 billion) compared to 161.117 billion yuan in the same period in 2024.
Domestic games revenue, which accounts for sales from China, rose 17% year-on-year to 40.4 billion yuan, while international gaming business brought in 18.8 billion yuan, a 35% year-on-year revenue.
Net profit for the three months ended June rose 17% to 55.63 billion yuan. Capital expenditure for the second quarter more than doubled from the year prior, but came in lower than the 27.48 billion yuan recorded in Q1.
Shares in Tencent climbed almost 5% during trading Wednesday, while shares in major Tencent shareholder Prosus extended gains in Europe, climbing as much as 3.9%.
The context: Tencent, China’s largest company by market capitalisation, is competing for AI dominance against Chinese rivals including Alibaba and DeepSeek, aiming to build leading AI models to enhance its suite of offerings across social media, gaming, cloud services and digital payments.
Bloomberg reports that Tencent has gained more than USD170 billion of market value in 2025, though some analysts think it remains undervalued relative to peers like Meta.
What they said: Ma Huateng, chairman and CEO of Tencent, said: “During the second quarter of 2025, we delivered double-digit revenue and non-IFRS operating profit growth on a year-on-year basis, as we invested in, and also benefitted from, utilising AI."
The sources: Tencent earnings, WSJ, Bloomberg, Reuters
