Tencent Holdings (TCEHY) exceeded market expectations in its fourth-quarter earnings, fueled by a surge in gaming revenue and significant strides in artificial intelligence development. The Chinese tech conglomerate, known for its super-app WeChat and dominance in the global gaming sector, reported impressive growth figures that have further boosted investor confidence.
Tencent’s Earnings Highlights
Tencent revealed adjusted earnings of 5.91 yuan per share on revenue of 172.4 billion yuan ($23.9 billion), surpassing analysts’ projections of 5.66 yuan per share and revenue of 168.1 billion yuan, as compiled by FactSet. Year-over-year, the company saw an 11% rise in revenue and a 33% increase in adjusted earnings per share.
Gaming Revenue Sees Accelerated Growth
The gaming segment was a major driver of Tencent’s performance. Revenue from its international gaming division surged by 15% year-over-year to 16 billion yuan ($2.21 billion), while domestic gaming revenue climbed 23% to 33.2 billion yuan ($4.6 billion). These growth rates marked a significant acceleration compared to the previous quarter’s 9% and 14% gains, respectively.
Marketing services revenue also grew 17% year-over-year, reaching 35 billion yuan ($4.84 billion), maintaining the same pace as the third quarter.
AI Investments Take Center Stage
Tencent is doubling down on artificial intelligence, unveiling innovative tools such as its open-source 3D visual generation system. The company has also integrated advanced AI models into its platforms, including DeepSeek technology in WeChat, to enhance functionality and user experiences.
In late February, Tencent launched its Hunyuan Turbo S AI model, claiming it delivers faster response times than competing models like DeepSeek. This move underscores Tencent’s commitment to staying ahead in China’s competitive AI landscape, which includes major players like Alibaba and Baidu, as well as startups like Manus AI.
In its earnings release, Tencent reiterated its focus on AI, pledging to increase capital expenditures in 2025. The company emphasized its investments in foundation models and infrastructure, aiming to meet rising demand and deliver long-term economic value.
Tencent Stock Performance
Tencent’s stock performance has been impressive in 2025, climbing nearly 30% to reach levels not seen since 2021. On Tuesday, shares dipped slightly to 69.46 but remain well above their cup-base buy point of 61.60.
The stock’s Relative Strength (RS) rating of 96 indicates that Tencent outperforms 96% of stocks in the market. Additionally, Tencent shares have a 21-day Average True Range (ATR) of 2.8, reflecting moderate volatility. This ATR figure highlights the stock’s steady movement, making it an appealing option for investors navigating a fluctuating market.
Leave a Reply