Tencent Just Dropped $25B Worth of Proof It's Not Playing Around

Khac Phu Nguyen

Thu, May 15, 2025, 10:31 AM 1 min read

Tencent (TCEHY) is making noise again. The Chinese tech titan conscionable delivered its strongest 4th successful implicit 3 years, with Q1 gross jumping 13% to 180.02 cardinal yuan ($25 billion). Not atrocious for a institution navigating tariff tensions, a shaky user market, and AI disruption. Net income roseate 14% to 47.8 cardinal yuanmissing estimates slightly, but for a crushed that mightiness excite semipermanent investors: assertive AI spending. Management isn't shying distant from pouring currency into R&D, and truthful far, markets are connected boardTencent shares are already up 25% successful 2025.

Here's wherever it gets interesting. Tencent isn't conscionable chasing AI headlinesit's stacking chips (literally). President Martin Lau confirmed the institution has capable high-end GPUs to support grooming its models for a fewer much generations. Thanks to a surge successful request from its unreality clients and the occurrence of China's homegrown DeepSeek AI, Tencent is present embedding AI everywherefrom WeChat and mini-games to advertisement targeting and virtual assistants. And portion executives admit the nett borderline mightiness instrumentality a short-term hit, they're betting that full-stack integration crossed products volition wage disconnected down the line.

But Tencent isn't conscionable betting connected the futureit's securing IP to ain it. Last year's hits similar Dungeon & Fighter Mobile helped dependable its gaming business, and 2025's pipeline includes Honor of Kings: World and Path of Exile 2. But the existent headline? Tencent's $1.25 cardinal woody for a 25% involvement successful a caller Ubisoft entity, giving it a nonstop enactment into franchises similar Assassin's Creed. It's a classical Tencent move: deliberation long-term, spell global, and fto the compounding bash the work.

This nonfiction archetypal appeared connected GuruFocus.