Alibaba, Tencent miss revenue expectations as AI spending weighs on growth

Alibaba Group Holding Ltd. (BABA) and Tencent Holdings Ltd. (TCEHY) reported revenue that missed analyst expectations, underscoring investor concerns that heavy artificial intelligence spending has yet to translate into faster growth. Alibaba’s revenue rose 3% in the March quarter, below estimates, while the company posted its first operating loss since early 2021 as it increased AI investment. Tencent reported its slowest revenue growth in more than a year, though advertising and gaming helped it outperform Alibaba. Alibaba’s U.S.-listed shares initially fell on May 13, 2026, before rebounding 6.5% amid a broader rally in Chinese equities. Alibaba has pledged about 380 billion yuan, or $56 billion, for AI over three years and said annual recurring revenue from AI models and services should reach 10 billion yuan in June 2026 and exceed 30 billion yuan by December 31, 2026. Tencent has lost about $160 billion, or 23%, in market value this year as investors shift toward pure-play Chinese AI firms.