ZTE Q3 Net Profit Surges 395% as AI Computing Infrastructure Drives Turnaround
ZTE reported a nearly fivefold increase in third-quarter net profit to 1.31 billion yuan, driven by rapid expansion in its AI server and data center businesses.
Chinese telecommunications equipment maker ZTE has released its third-quarter financial results, showing a net profit of 1.31 billion yuan (approximately US$196.3 million), a 395% increase from the same period last year. This strong rebound was primarily driven by rapid expansion in artificial intelligence computing infrastructure and continued growth in overseas operations.
Revenue for the quarter rose 34% year-on-year to 38.81 billion yuan. In the first nine months, computing-related revenue surged over 70%, accounting for 38% of total sales. Within this segment, revenue from servers and storage grew more than 70%, while sales of data-center products jumped nearly 130%.
ZTE stated that since the beginning of 2026, it has remained focused on AI as a strategic priority. The company noted that growth in computing infrastructure, consumer terminals, and international sales helped counter a slump in capital expenditure by domestic telecom carriers. International revenue increased more than 30% during the nine-month period, propelled by global opportunities in 5G networks, fibre upgrades, and AI computing infrastructure.
Despite the quarterly rebound, ZTE's overall net profit for the first nine months dropped 23.7% year-on-year to 4.06 billion yuan, reflecting ongoing pressure on gross margins from industry cycles and product mix shifts. The company said it is refining its product architecture to reduce cost per token through better coordination between computing hardware and network systems, acknowledging that competition in the AI industry is shifting from expanding capacity to improving efficiency across the entire token-processing chain.