Tencent’s 0700.HK profit misses estimates as AI spending offsets gaming gains

Tencent Holdings’ first-quarter revenue rose 9% to 196.5 billion yuan ($28.94 billion), missing analysts’ forecast of 198.96 billion yuan, as higher artificial intelligence spending weighed on profit. Net profit was 58.1 billion yuan, below estimates of 61.42 billion yuan. Gaming remained a key driver, with domestic gaming revenue up 6% and international gaming revenue up 13%. Flagship titles including “Honour of Kings” and “Peacekeeper Elite,” along with “Delta Force,” supported user engagement. Online advertising revenue rose 20% to 38.2 billion yuan, helped by AI-based ad targeting. Tencent unveiled its Hunyuan 3.0 large language model in April 2026 as it seeks to narrow the AI gap with ByteDance and Alibaba. The company said in March 2026 it would increase AI investment, including proprietary models. First-quarter capital expenditure rose to 31.9 billion yuan from 27.5 billion yuan a year earlier, after 2025 capex reached about 79 billion yuan.