Tencent reported a 21% jump in net profit for the first quarter of 2026, reaching 58.1 billion yuan ($8.6 billion), up from 47.8 billion yuan in the same period last year. The result edged past analyst estimates of 57.8 billion yuan, according to a Bloomberg survey of economists.
The Shenzhen-based company, which operates the WeChat app and holds a major position in the global gaming industry, attributed the performance in part to early progress on new AI products and the continued use of AI to support its existing businesses. Revenue for the quarter reached 196 billion yuan, a 9% increase year-on-year — a slower pace compared to the double-digit revenue growth Tencent posted in each quarter of 2025.
Tencent has been expanding its AI presence on several fronts. The company hired a former OpenAI researcher last year to lead its AI venture and, in April 2026, unveiled a preview of a major upgrade to its flagship AI model. It is competing in the sector against Alibaba, ByteDance, and startup DeepSeek — and is reportedly in discussions to invest in DeepSeek, whose first external financing round could value it at up to $50 billion.
Also in May 2026, Chinese regulators granted conditional approval, following an antitrust review, for Tencent to acquire online audio platform Ximalaya.
Despite the profit growth, analysts at Bloomberg Intelligence flagged potential headwinds. Rising AI costs — including expenses tied to agentic AI token usage — could pressure margins, even as Tencent has raised prices in its cloud computing division. Slower video game sales, partly attributed to the timing of the Lunar New Year holiday, also weighed on quarterly earnings. Analysts added that they do not expect Tencent to generate significant external revenue from AI in 2026, though AI-driven targeting may continue to benefit its advertising business.
Source: Tech-Economic Times