TENCENT’s revenue beat estimates after growing its gaming and social media portfolio through a persistent Chinese economic slowdown.

Revenue for the three months ended March rose to 180.02 billion yuan ($25 billion), versus an average estimate of 175.6 billion yuan. Net income for the period rose 14% to 47.8 billion yuan.

The numbers underscore how investors regard China’s most valuable company as resistant to much of the economic turmoil stemming from the Trump administration’s tariffs campaign. Its shares are up more than 20% in 2025. Yet it runs a giant cloud, advertising and fintech services business vulnerable to economic shocks and a slowdown in domestic consumption.

Tencent is among the biggest beneficiaries of a Chinese tech renaissance triggered by DeepSeek, whose January release of the R1 model upended the idea of US AI dominance and rekindled interest in homegrown technology. The Shenzhen conglomerate rushed to buy up artificial intelligence chips around the end of last year to serve growing demand from cloud clients. Its apps, including WeChat and the ChatGPT-style Yuanbao, have gained users since integrating with DeepSeek’s offering.

To counter a plateauing home market, the world’s biggest games publisher has also focused on grooming what it calls evergreen franchises — established titles that players will stick with through multiple versions and updates.

Last year’s breakout hits, Dungeon & Fighter Mobile and Delta Force, helped the company stem a contraction in its marquee business, but it remains to be seen whether players will stick around. The company’s also playing catchup in AI, one of the few growth stories within the country’s trillion-dollar tech sector.

Still, investors are betting the company will successfully experiment with newer initiatives such as mini-games and the Hunyuan foundation model.

Executives including billionaire founder Pony Ma have outlined plans to rely on both third-party and self-made models to win the AI race, mirroring a playbook that seeded Tencent’s gaming leadership two decades ago.

Many observers have drawn parallels between AI and the rise of smartphone apps — a tidal shift that will create new winners and threaten the old guard. Tencent’s longtime foe Alibaba Group Holding Ltd. has only gotten more aggressive, pledging to spend billions to build data centers and investing in many of China’s up-and-coming AI platforms.

What Bloomberg Intelligence Says

Artificial intelligence will remain in focus at the first quarter results, though we don’t expect Tencent to generate meaningful incremental earnings in AI this year. The internet giant should remain relatively unaffected by US tariffs for now, though its fintech and ad divisions remain exposed to potential second-order effects, should Chinese economic growth slow in 2H.

- Robert Lea, analyst

For now, WeChat remains Tencent’s most reliable asset as it takes on bigger monetization roles in area from advertising to mini-games and TikTok-style shopping. Though broader consumer sentiment remains shaky, Tencent has sought to introduce even more features to its all-in-one platform — including a gifting function that’s received a mixed reception from both merchants and buyers.

In terms of gaming, it’s unclear whether Tencent can replicate the success of last year. Its pipeline for 2025 includes highly anticipated titles like Honor of Kings: World and the Chinese rollouts of Path of Exile 2 and Goddess of Victory: Nikke. But few are considered sure-fire hits like DnF Mobile, which owed its success to loyal players trying out a fresh version of their PC favorite.

In a deal announced March, Tencent said it will invest about $1 billion to acquire a 25% stake in a new entity holding Ubisoft Entertainment SA’s most celebrated intellectual properties. That could give the Chinese company a bigger say in shaping the future of global franchises like Assassin’s Creed, which Tencent is adapting for mobile.