Tencent’s Q3 Profit Jumps 19%—AI Power Play Crushes Analyst Expectations

Another quarter, another beat—Tencent’s AI bets are paying off big.

The Numbers Don’t Lie

19% profit surge? Check. Wall Street left scrambling? Obviously. The Chinese tech giant’s Q3 earnings just schooled skeptics on how to monetize machine learning without the usual vaporware promises.

Why It Matters

While Western tech firms drown in ‘AI ethics’ committees, Tencent’s quietly turning algorithms into revenue streams. No grandstanding—just cold, hard growth. (Take notes, Meta.)

The Bottom Line

Tencent’s playbook: Deploy AI, print money, repeat. Meanwhile, hedge funds still can’t decide if ‘generative AI’ is a trend or a bubble—how’s that 2-and-20 fee working out?

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Tencent Holdings is a Chinese multinational conglomerate specializing in gaming, social media, and AI-driven digital services.

Tencent Q3 Boosted by Gaming Success

In Q3, the company’s revenue rose 15% to ¥192.87 billion, surpassing analysts’ expectations of ¥189.15 billion.

Tencent’s Core business of value-added services, including gaming, marketing, and social media, earned ¥95.9 billion, up 16% from last year. Moreover, domestic game revenues grew 15%, boosted by hits like “Delta Force” and “Valorant Mobile.” Meanwhile, international gaming jumped 43% to ¥20.8 billion.

Tencent’s AI Efforts Pay Off

For the last few years, Tencent has been investing heavily in AI, developing its own large language model (LLM) and using AI to improve productivity and cut costs across its businesses. These efforts are paying off, with strong recent financial results.

The company also increased capital spending earlier this year to expand AI and cloud services in Europe, competing with Amazon (AMZN), Google (GOOGL), and Microsoft (MSFT). In Q3, capital expenditure slowed, falling 24% year-over-year to ¥13 billion.

Additionally, Tencent upgraded its foundational AI model, HunYuan, enhancing coding, math, and science capabilities. Looking ahead, the company is optimistic that as HunYuan improves, its chatbot app Yuanbao and the AI features in WeChat are expected to gain more traction.

Is Tencent a Good Stock to Buy?

Tencent’s OTC‑listed shares lack analyst coverage—so let’s focus instead on its Hong Kong listing.

According to TipRanks’ rating consensus, 0700 stock has received a Strong Buy rating, backed by 27 Buys assigned in the last three months. The Tencent share price forecast is HK$732.92, which implies an upside of 12% on the current trading level.

These ratings and price targets will likely change as analysts update their coverage following today’s earnings report.