Tencent Holdings Wednesday reported first-quarter results that beat expectations, with the Chinese tech giant highlighting momentum for its gaming business and AI push. Tencent stock advanced as the report showed the company's strongest revenue growth since 2021.
The China-based messaging and gaming company reported adjusted earnings of 6.58 yuan per share on revenue of 180 billion yuan, or $25 billion. Analysts expected Tencent to report earnings of 6.35 yuan per share on revenue of 173.9 billion yuan, according to FactSet. Sales climbed 13% year over year in local currency while adjusted earnings per share increased 25%.
Tencent is the parent company of the Chinese super-app Weixin, known as WeChat internationally, that is widely used in the country. It also is one of the world's largest video game companies. The tech giant is developing AI tools, which it said in a news release helped boost engagement for Weixen.
"AI capabilities already contributed tangibly to businesses, such as performance advertising and evergreen games," Tencent Chief Executive Ma Huateng said in a news release. "We also stepped up our spending on new AI opportunities, such as the Yuanbao application and AI in Weixin."
Domestic gaming revenue increased 24% year over year to 43 billion yuan. Marketing revenue rose 20% to 32 billion yuan, which Tencent credited in its earnings release to "higher user engagement, ongoing AI upgrades to our advertising platform, and improvements to the transaction ecosystem within Weixin."
Tencent stock, which is listed in Hong Kong but trades over the counter in the U.S., was up 3.5% at 67.94 in recent action on the stock market today. IBD MarketSurge charts show Tencent's OTC stock in a cup pattern with a 69.50 buy point.
Tencent Stock Up 22% In 2025
Tencent stock fell a fraction to 65.61 Tuesday but is up 22% overall this year. Shares have fallen from 2025 highs in early March amid concerns about the U.S.-China trade war, among other factors.
An IBD Relative Strength Rating of 92 out a best-possible 99 indicates that TCEHY stock is outperforming 92% of all stocks.
