Tencent 1Q25:AI Tailwind Starts to Become Visible in Advertising Business

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Ahead of Tencent’s upcoming earnings release, we conducted a quick survey to gauge key trends.

Based on the responses, both the advertising and gaming segments appear likely to come in modestly above expectations. Tencent Cloud is also showing signs of sequential acceleration. However, growth remains somewhat constrained by the company’s internal GPU allocation policy — with high-priority use cases such as advertising and AI Agent workloads continuing to take precedence. As a result, the cloud ramp is expected to be only modest.

Advertising

• Pure ad revenue growth appears to be tracking close to the market’s estimate of ~18%. However, when factoring in other monetization channels like WeChat Coins (used for gifting in livestreams), total ad-related revenue growth likely reaches ~20% or beyond

• Video Accounts (Channels) continue to increase ad load, with incremental contributions from Wechat search and Official Accounts

• Advertiser budgets are showing signs of recovery

• AI-powered ad models are gradually improving ROI. Conservative expert estimates suggest AI contributes to 10–20% of total ad revenue growth, or roughly 2–4% of total revenue

Gaming