Tencent Outshines Alibaba and JD.com as Gaming Revenues Surge

Tencent Holdings Ltd., one of China’s biggest technology companies, is once again in the spotlight as gaming revenues surge. As concerns rise about an overheated artificial intelligence (AI) stock bubble, investors are shifting their focus toward Tencent. The company is seen as a safer and more stable option in China’s competitive tech market.

While rivals such as Alibaba and JD.com struggle with falling profits and intense price wars, Tencent stands out. Analysts expect Tencent to post positive profit growth in its upcoming quarterly results — something few Chinese tech giants can claim this year.

Tencent Outshines Alibaba and JD.com as Gaming Revenues Surge

The optimism is reflected in the market. Tencent’s stock has risen 4.5% this month and gained 58% so far in 2025, adding nearly $280 billion to its market value. Despite these impressive gains, the company still trades at a discount compared to global giants like Amazon and Nintendo.

According to Elinor Leung, Managing Director at CLSA, Tencent’s position is strong because it faces less competition in key areas. “Tencent offers very defensive growth in this kind of environment because they have less competition,” she said, adding that she considers Tencent her top pick in the sector.

Gaming Business Leads the Charge

Tencent’s gaming division remains its strongest pillar. The company’s vast collection of popular games continues to attract loyal players, helping it maintain steady revenues. New blockbuster titles are performing better than expected, while legacy games are still seeing 30% to 40% growth.

Unlike some of its Chinese tech peers that rely heavily on discounts or promotions to attract users, Tencent’s games maintain stable pricing and customer loyalty. This resilience has made its gaming segment one of the most reliable revenue sources in China’s volatile tech market.

AI and Advertising Add New Momentum

Tencent is also making strides in artificial intelligence. Its Hunyuan model has quietly made progress, and the company is now using generative AI for game development and advertising. AI upgrades have boosted ad placements across Tencent’s video platforms, increasing revenue in recent quarters.

Morningstar analyst Ivan Su believes this trend will continue. “I wouldn’t be surprised if they beat estimates again,” he said. “The market hasn’t fully priced in the AI upside to earnings.” Su also noted that Tencent’s AI-driven cost savings and revenue growth could exceed current expectations.

Outperforming the Competition

While other tech giants are struggling, Tencent is thriving. Analysts expect the company’s earnings for the September 2025 quarter to grow around 5% year-on-year. In contrast, Alibaba and JD.com may see profit declines exceeding 60% due to rising competition and slowing consumer demand.

Goldman Sachs analysts forecast that overall profits for China’s internet companies could fall nearly 30%, making Tencent a rare bright spot among major players.

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Looking Ahead

Tencent’s combination of strong gaming revenues, strategic AI integration, and steady advertising growth positions it well for continued success. With investors seeking safer bets amid market uncertainty, Tencent’s balanced approach to innovation and profitability is paying off.

If current trends continue, the company’s $280 billion rally might just be the beginning of a new chapter in its long-term growth story.