Robust Revenue Growth, Strategic Investments Drive Gains For Tencent Music Entertainment Group (TME)
A singing performer silhouetted on a spotlighted online stage.
The Chinese music streaming giant reported a first-quarter revenue of RMB 7.36 billion, increasing 8.7% year-over-year and surpassing forecasts of RMB 7.27 billion, due to robust growth in revenues from online music services. The company's adjusted profit of RMB 1.37 also topped estimates of RMB 1.33.
Tencent Music Entertainment Group (NYSE:TME) also saw strong subscriber growth during the quarter, mainly due to its investments in long-form content, such as audiobooks and podcasts, which is helping offset the weakness in its social entertainment business.
CFRA Research analyst Ahmad Halim had the following to say on the company's Q1 2025 results:
'Tencent Music's continued innovation in AI-powered personalization, long-form audio and fan-driven commerce, combined with cost discipline and increased content scale, will support margin expansion and deeper monetization through the second half of 2025.'
Investor sentiment has also been bolstered by a South Korean filing late in May that revealed Tencent Music Entertainment Group (NYSE:TME) was acquiring a 9.7% stake worth $177 million in K-pop agency SM Entertainment, making it the second-largest shareholder of the company.
While we acknowledge the potential of TME as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 13 Best German Stocks to Invest in Now and Goldman Sachs Stock Portfolio: 10 Large-Cap Stocks To Buy.
Disclosure: None.
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