Huawei's Revenue Growth Stalls Amidst AI Competition and Market Challenges

Huawei Technologies Co. reported a significant slowdown in its revenue growth for 2025, with total revenue rising by only 2.2% to 880.9 billion yuan ($126 billion), a stark contrast to the 22% growth experienced the previous year. The company's cloud computing revenue from external customers fell by 3.5% to 32.16 billion yuan ($4.6 billion). Although overall cloud revenue, including internal customers, increased by 4.8% to 72.8 billion yuan, the main ICT infrastructure segment, which encompasses Huawei's self-developed Ascend AI chip solutions, saw growth slow to 2.6%, down from 4.9% in 2024. This decline is attributed to intensified competition from domestic AI chipmakers and the impact of U.S. sanctions limiting access to advanced technologies.

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Huawei remains the largest smartphone vendor in China despite a 2% decline in shipments, primarily due to the resurgence of Apple Inc. with its iPhone 17, which saw a 4% increase in sales. The Chinese smartphone market overall contracted by 0.6%. In the AI chip sector, Huawei is positioning itself as a leading competitor to Nvidia Corp., supported by a three-year roadmap focused on enhancing its Ascend chips and AI servers for data centers. However, the company faces increasing competition from local firms such as Cambricon Technologies Corp., Alibaba Group Holding Ltd., and Baidu Inc., which are also developing their own AI solutions.

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Despite the challenges, Huawei's net profit rose by 8.7% in 2025, bolstered by a burgeoning smart car solutions division that reported a 72% revenue increase to 45 billion yuan. The company has committed over 190 billion yuan to research and development, emphasizing advancements in AI and electric vehicle technologies. This investment strategy reflects Huawei's efforts to diversify its offerings and reduce reliance on traditional consumer electronics.

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Critics argue that Huawei's growth strategy may be hampered by ongoing geopolitical tensions and regulatory challenges. The U.S. sanctions have significantly restricted Huawei's access to critical components, which could stifle innovation and competitiveness in the global market. Additionally, the emergence of domestic rivals in the AI chip sector raises concerns about Huawei's ability to maintain its market leadership.

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Huawei's management has acknowledged the challenges posed by external competition and regulatory pressures. They emphasized the company's commitment to innovation and self-sufficiency in technology development, particularly in AI and cloud computing. The firm continues to explore new markets and technologies to sustain its growth trajectory.

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• “Huawei is advancing a three-year chip technology roadmap anchored by increasingly sophisticated Ascend chips and AI servers for data centers.” — Huawei Executive

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• “’s growth decelerated sharply after Apple Inc.” — Market Researcher

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Looking ahead, Huawei is expected to continue its focus on AI and electric vehicle technologies while navigating the competitive landscape shaped by both domestic and international players. The company's ability to adapt to market changes and regulatory environments will be crucial for its future growth.

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