Goldman Sachs' China Internet Q2 Preview: Cloud Growth and AI Capex Are Key Themes
Taylor Wilson
Goldman Sachs previews Q2 earnings for China's internet giants, flagging accelerating cloud revenue, rising AI capex, and a food-delivery profit inflection as the three key threads — the sector looks constructive after the recent pullback.
What is this preview about?
Goldman covers Q2 expectations for Tencent, Alibaba, Meituan, JD.com, and Pinduoduo, all reporting between mid- and late August.
The core call: U.S. hyperscalers saw positive stock reactions after their Q2 results. This means → the market is still buying the "cloud + AI" theme, and Chinese peers stand to benefit.
Goldman's sub-sector preference order: cloud & data centers (GDS, VNET, Alibaba, Kingsoft Cloud) first, then gaming, e-commerce & mobility, and AI models.
Tencent — can cloud acceleration offset fintech drag?
Expected to report on August 12. Q2 revenue forecast at +9% YoY; adjusted EBIT at +9% YoY to RMB 75.2 billion.
The three engines are running at different speeds: gaming +11%, advertising +18%, fintech & enterprise services +8%. In plain terms = ads and gaming are pulling ahead, but fintech is dragging; cloud acceleration is the main lift inside the enterprise segment.
Beyond the numbers, the market wants answers on AI capex priorities, the Hunyuan model strategy (Tencent's in-house large language model), and early metrics for WorkBuddy and WeChat Agent.
Alibaba — cloud growth at 45%, but where does the profit come from?
Expected to report its first fiscal quarter on August 20. Q2 revenue at +9% YoY; adjusted EBITA down 33% YoY to RMB 26 billion.
This means → the top line is holding, but margins are being squeezed hard — Goldman estimates instant retail (Ele.me and similar on-demand services) alone consumed roughly RMB 10 billion in Q2 investment.
The bright spot is cloud: Alibaba Cloud growth is forecast to accelerate to 45%, with cloud margins improving to 11.1%. The market is watching AI capex funding sources and margin upside for GPUaaS — GPU-as-a-service, selling compute like a utility — over the coming quarters.
Meituan — competition cools, how much more per order?
Goldman raises Meituan's 2026–2028 adjusted net profit forecasts, driven by lower food-delivery competitive intensity.
Per-order delivery profit is expected to improve to RMB 0.26, 0.80, and 1.13 respectively. In plain terms = from barely breaking even to a clear profit trajectory, roughly quadrupling over three years.
Q2 forecast: revenue +10% YoY, adjusted EBIT +56% YoY to RMB 5.8 billion. Target price raised from HK$116 to HK$123; Buy rating maintained.
JD.com and Pinduoduo — one chasing margins, the other riding Temu?
JD.com: Q2 revenue -3% YoY, yet adjusted EBIT surges +587% YoY to RMB 6.2 billion. This reflects a deliberate pivot from growth-first to profit-first; retail margin at 4.6% is the metric to watch.
The market also wants clarity on JD's shareholder-return policy and the pace of Joybuy's international expansion.
Pinduoduo: Q2 revenue +8% YoY, adjusted EBIT -4% YoY to RMB 26.7 billion. The focus is on Temu's GMV (gross merchandise value) and profitability, domestic GMV growth drivers, and AI-powered ad-tech adoption.
What signal should investors watch this earnings season?
Goldman spells it out: whether each company's capex guidance is revised upward during earnings calls — that is the key validation point for a sustained sector recovery.
This means → revenue and profit alone are not enough; the direction and scale of capex — especially the share going to AI and cloud — is the "put your money where your mouth is" signal.
Sub-sector preference ranking: cloud & data centers > gaming & entertainment > e-commerce & mobility > AI models — the closer to compute infrastructure, the more bullish Goldman is.
Content is for reference only, not financial advice.