Tencent's 2025 revenue tops estimates as it ramps up AI spending

Chinese technology giant Tencent Holdings reported quarterly revenue that beat analyst expectations and reiterated that its core businesses will fund increased investments in artificial intelligence (AI). The company said revenue for the three months ended Sept. 30 was 192.9 billion yuan, above the LSEG consensus of about 188.9 billion yuan.

Growth was driven by stronger gaming and advertising sales: domestic gaming revenue rose 15% while international gaming jumped 43%, and advertising revenue increased roughly 21% as AI-enabled targeting improved monetization. Tencent reported net profit of 63.1 billion yuan and highlighted that its operating cash generation from core operations supports further AI and cloud investments.

Company executives said capital expenditure focused on AI would be in the "low teens" percentage of revenue in 2025, and stressed that chip shortages are constraining cloud expansion. President Martin Lau noted that when AI chips are scarce, Tencent prioritizes internal use over renting compute externally, which has moderated cloud growth despite broader demand.

Market reaction reflected cautious optimism: the revenue beat and strong gaming performance reassured investors about short-term earnings momentum, while the commitment to scale AI investments underlines a longer-term growth strategy. However, persistent constraints in advanced chip supply and the timing of infrastructure deployment could limit the pace of cloud revenue upside.

Analysts say the outlook hinges on Tencent's ability to convert AI investment into monetizable services across advertising and gaming, and on easing of chip supply pressures. Short-term catalysts will include quarterly capex disclosure, cloud revenue trends, and the commercial impact of AI products integrated into WeChat and other platforms. Investors will watch whether the company's AI push translates into sustained margin expansion and revenue diversification.