Huawei returns to profit: AI wave relaunches Chinese hi-tech giant

First half year with declining profits, but rising revenues. These are still figures that put a smile on Huawei's face in the first half of the year. In the first six months of 2025, the Shenzhen-based tech giant posted a net profit of 37.1 billion yuan (around 4.4 billion euros). A figure down 32% year-on-year, but enough to erase the surprise loss in the last quarter of 2024. The credit? A combination of factors ranging from the relaunch of smartphones to the boom in artificial intelligence, driven by the DeepSeek phenomenon.

The debut of the new language model developed in China - capable of rivaling OpenAI's GPT-4 - has triggered a national race for artificial intelligence. And Huawei, with its Ascend smartphones, has become a major player: local developers, from Alibaba to Baidu, have embraced the domestic standard, while Beijing has encouraged the abandonment of Nvidia solutions, held back by the block imposed by Washington on the export of the most advanced chips.

The return to profit cannot be explained by AI alone, however. The Shenzhen bigwig founded by Ren Zhengfei has also regained its strength in the smartphone market: in the second quarter it shipped 12.5 million devices in China, taking first place in sales for the first time in more than four years and ousting Apple, which has been penalised by a stagnant domestic economy and an increasingly fierce challenge with Xiaomi.

At the same time, the group reorganised its internal structure, reorienting its cloud division towards AI and high performance computing. And it does not stop there. In fact, the venture into electric vehicles continues to take shape. The Maextro S800 sedan, developed with Anhui Jianghuai Automobile, has already received 10,000 orders within a few weeks of its launch, a sign that Huawei intends to play a leading role in the automotive sector as well.

However, the picture remains complex: the shrinking profit reflects the huge investment in research and development, essential to survive the US sanctions wall and the global technology challenge. But the message coming out of Shenzhen is clear, with Huawei less and less on the defensive and enjoying a medal from Counterpoint Research's latest quarterly report. It concerns smartwatches. Huawei's 52% increase in sales in the second quarter of 2025 contrasts with Apple's -3%, which continued in a negative trend that has persisted for seven consecutive quarters. For the Shenzhen bigwig, a big boost came from performance in the Chinese domestic market, which accounts for more than 75% of the company's total shipments. The result: in the second quarter of the year, Huawei ranked first in global sales: 21% versus Apple's 15%. And that's a first.