Tencent and Alibaba revenue disappoints as AI monetization efforts fall short
Chinese tech giants Tencent and Alibaba both missed market expectations in their latest quarterly results. The companies' AI products have not yet delivered the expected revenue streams.
Tencent's revenue rose 5.3% to 178 billion yuan in the January-March quarter, below the 7.2% increase analysts had expected. Momentum in advertising and gaming slowed.
Alibaba's group revenue increased 3%, but core operating profit fell 84%. Heavy investments in AI and instant-retail services squeezed margins. Although the cloud segment grew 24%, US export curbs are limiting chip supply.
Share prices traded with modest losses in Hong Kong after the results. JPMorgan and Goldman Sachs analysts expect AI revenue to make a meaningful contribution from 2027. China's central bank said it will maintain liquidity support for the technology sector.
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