Tencent Shares Rally on Strong Q2 Earnings and AI Leadership

Tencent Holdings Ltd. surged 6.8% as investors cheered accelerating revenue growth and margin expansion. The Chinese tech giant posted 15% year-over-year sales growth, outpacing both the prior quarter's 13% and the year-ago period's 8% increase.

Artificial intelligence capabilities emerged as a key driver, contributing to both top-line performance and cost efficiencies. Every major division delivered double-digit growth except social networks, where video content shortages limited gains to 6%. Gaming revenues jumped 17% domestically and 35% internationally.

The $100 billion revenue behemoth continues defying scale limitations, with gross margins improving 110 basis points sequentially. Seasonal compensation impacts temporarily pressured operating margins, but the underlying trend reflects Tencent's operational discipline.