Huawei H1 Profit Drops 36% on R&D Push

Huawei reported a mixed first half of 2026: revenue rose 9.6% to about 467.8 billion yuan, while net profit fell roughly 36% to 23.81 billion yuan as costs rose and profitability narrowed. The company’s operating margin shrank to about 7%, driven by elevated expenses and a heavy R&D push. R&D spending surged to roughly 121.38 billion yuan, around a quarter of revenue, funding AI, chip development, and related tech as part of Huawei’s strategy to reduce reliance on foreign technology. The results reflect ongoing headwinds from memory-price pressures on its consumer business and broader cost pressures, even as the top line grows. Huawei says 2026’s outlook remains under review given external uncertainties and higher component costs. The earnings narrative underscores a deliberate shift toward domestic tech sovereignty to support self-sufficiency, even as profitability softens amid a growth trajectory in revenue.