Key Points

• Tencent beats on AI and games: Revenue rose 15% as AI improved ad targeting and new titles lifted gaming; international game sales jumped 43%, and Tencent is expanding its cloud services in Europe.
• Shutdown ends, services restart: A new funding law reopens the U.S. government through January, bringing federal workers back, restoring data releases, and easing planned air travel cuts.
• Cisco lifts outlook on AI demand: Strong orders for high-performance networking from major cloud customers led Cisco to raise its sales and profit forecasts into 2026.
• Toyota deepens U.S. footprint: Production begins at a $13.9B North Carolina battery plant, alongside up to $10B more U.S. investment, reinforcing Toyota’s hybrid-focused strategy and domestic supply chain.

Tencent Revenue Up 15% on AI-Boosted Ads and Strong Gaming

Tencent reported third-quarter revenue of RMB 192.9B (above estimates) and operating profit of RMB 63.6B, driven by better ad targeting from its AI tools and solid game performance.

Core businesses—gaming, marketing, and social platforms—rose 16% to RMB 95.9B, while international gaming jumped 43% to RMB 20.8B.

Tencent is also investing in AI models (HunYuan) and expanding its cloud services in Europe to compete with global leaders.

The stock is up approximately 57% year-to-date.

Shutdown Ends; Services Restart as Funding Extends to January

President Trump signed a bill to reopen the federal government after 43 days, ending the longest shutdown in U.S. history.

The House approved the measure 222–209 after the Senate cleared it earlier in the week, funding operations through January and reversing shutdown-related layoffs while restoring pay for more than a million workers.

Agencies told staff to return Thursday; food assistance (SNAP) will be funded, and a December vote on extending ACA subsidies is planned.

The Transportation Department froze planned flight cutbacks tied to controller shortages, easing near-term travel disruption as government data and services come back online.

Cisco Lifts Outlook on Growing AI Network Orders

Cisco shares rose after the company raised its annual sales and profit targets, citing stronger demand for high-performance networking tied to AI and cloud upgrades.

Management reported over $2 billion in AI-related orders for fiscal 2025, largely from major cloud providers, and projected about $3 billion in AI infrastructure revenue for fiscal 2026.

The pipeline spans hyperscalers, “neocloud,” sovereign, and enterprise customers, supporting expectations for broader campus network refreshes.

Cisco now guides FY26 revenue to $60.2–$61.0 billion (from $59.0–$60.0 billion previously), reinforcing the view that rising data-center spending by big tech is feeding into core networking budgets.

Toyota Starts U.S. Battery Production, Lifts Investment Plan

Toyota began output at its new $13.9 billion battery plant in North Carolina and said it will invest up to an additional $10 billion in the U.S. over the next five years.

The facility, Toyota’s first in-house battery plant outside Japan, supports a strategy tilted toward hybrids as consumer demand cools for full EVs.

Toyota holds more than 51% of the U.S. hybrid market and U.S. sales rose 9.9% through the third quarter to over 1.3 million vehicles.

The move strengthens domestic supply chains for batteries and positions Toyota to navigate shifting regulations and tariffs while scaling electrified models.

Conclusion

Markets leaned risk-on as policy and corporate signals turned constructive.

The U.S. shutdown’s end restores government services and data flow, easing a key overhang.

In technology, AI demand is translating into real revenue; Tencent’s ads and games accelerated, while Cisco raised its outlook on cloud and data-center networking orders, supporting the infrastructure layer of the AI cycle.

In autos, Toyota’s North Carolina battery launch and added U.S. investment reinforce a pragmatic tilt toward hybrids and onshored supply chains.

Near term, prioritize durable cash generators exposed to AI and electrification. Watch incoming U.S. releases, China growth signals, and tariff developments for the next catalysts.

Investment Insights

• Tencent: Favor platforms that turn AI into measurable revenue (better ads, stronger game engagement) and show expanding international reach.
• U.S. shutdown ends: With services and data flow restored, focus on companies tied to public-sector activity and travel that benefit from reduced policy uncertainty.
• Cisco: The AI build-out needs reliable networking, prioritize “infrastructure enablers” with strong cloud customer pipelines and clear delivery visibility.
• Toyota: Hybrids and local battery capacity are gaining ground, look to North America–centric auto and battery supply chains positioned for steady, practical electrification.

Economic Calendar