Huawei is spending heavily to build for the long term.
According to a Monday filing with the Shanghai Clearing House, China’s primary central clearing house for the interbank market, Huawei spent RMB 121.4 billion (USD18 billion) on R&D in the first half of 2026, up 25% from a year earlier and accounting for more than a quarter of its total revenue.
That spending, along with rising component costs, pushed net profit down 36% to RMB 23.8 billion(USD3.5billion). Net operating cash flow also took a heavy hit, swinging from a RMB 31.2 billion (USD4.6 billion) inflow a year earlier to a RMB 39.9 billion (USD5.9 billion) outflow.
Still, revenue grew 9.6% to RMB 467.8 billion (USD69.6 billion), helped by a rebound in smartphones and stronger demand for its AI processors.
Huawei is clearly prioritizing long-term technological investment over short-term profitability. The question is whether today’s heavy R&D spending can translate into the technologies that drive its next phase of growth.