Robust Revenue Growth, Strategic Investments Drive Gains For Tencent Music Entertainment Group (TME)

Tencent Music Entertainment Group (NYSE:TME) is among the 13 Best Booming Stocks to Buy Now. The stock has had impressive year-to-date returns of nearly 80%, driven by strong financial performance and positive investor sentiment resulting from a recent strategic acquisition.

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 risk and potential of TME as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TME and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.