Tencent earnings jump despite higher AI spend, but revenue growth slows
By Benjamin Chiou
Date: Wednesday 13 May 2026
(Sharecast News) - Tencent beat profit forecasts with its first-quarter results on Wednesday, with shares rising in Hong Kong despite the WeChat owner and videogam giant reporting its slowest rate of revenue growth in six quarters.
The company posted net profit of RMB58.1bn in the first quarter, up 21% year-on-year, helped by strong advertising and gaming growth, which it said was fuelled by AI-driven ad recommendations across the WeChat business. That was ahead of the RMB56.6bn expected by analysts.
Nevertheless, adjusted net profit growth came in at just 11%, slowing from the 17% growth reported for the fourth quarter.
However, revenues rose by just 9% to RMB196.5bn, under the RMB199bn consensus estimate, as the later-than-usual timing of the Lunar New Year holiday affected the top line.
Specifically, domestic gaming revenues rose by just 6% year-on-year in the quarter as a result of the holiday timing, while international gaming revenues jumped 13%. Revenues in the online ad and business services businesses were both up 20%.
The company, which has ramped up its investments into AI over the past year to keep up with rivals ByteDance and Alibaba, spent RMB31.9bn on capital expenditure during the quarter, up from RMB27.5bn a year earlier, though the increases are expected to weigh on margins over the coming year.
"We started 2026 by making significant initial progress on our new AI products, as well as continuing to utilise AI to grow our existing core businesses," said chair and chief executive Ma Huateng.
"Our core businesses continued to grow their engagement, revenue and profit, providing the cash flow to fund our AI investments, as well as use cases for future AI deployment," he said.
The stock finished 1.2% higher at HKD462.60 by the close of play in Hong Kong.
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