SINGAPORE – Sea Ltd. shares surged after the Singapore-based tech giant boosted its e-commerce earnings forecast in a sign of strength against rivals such as Alibaba Group Holding.
Its US-listed stock climbed as much as 13 per cent after Sea predicted US$1 billion (S$1.3 billion) in adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) for online-retail arm Shopee in 2026. It had previously forecast at least US$880.6 million, and analysts were expecting US$980.7 million on average.
The guidance hike suggests Shopee, Sea’s biggest business, is managing to ward off fierce competition from ByteDance’s TikTok, Alibaba’s Lazada and upstarts like Temu in South-east Asia’s rapidly growing e-commerce market. Yet margins remain thin as Sea spends to expand in markets such as Brazil and contends with challenges such as potential regulatory hurdles in Indonesia and cost increases caused by the conflict in the Middle East.
To widen its take rate, the share of merchandise sales earned as revenue, Shopee is increasingly relying on its advertising business. The company made 70 per cent more from ads in the second quarter, mainly from charging sellers higher fees compared with 2025, chief executive officer Forrest Li said on a conference call.
“We still see opportunities to increase our take rate,” Li said.
Second-quarter revenue for the company as a whole rose 48 per cent to US$7.8 billion, topping the US$7.1 billion average analyst estimate. Adjusted Ebitda for the three months through June advanced 11 per cent to US$917 million, while earnings on that basis at Shopee climbed 12 per cent to US$255 million.
The stock-price gain erased Sea’s losses for the year. Through Aug 10, the shares had declined 10 per cent in 2026 as investors assessed the impact of intense competition and rising oil prices on its operations.
The company has increased development spending and made structural shifts after Li declared that a trillion-dollar market capitalisation was possible if Sea doubled down on artificial intelligence. Li is betting the AI investments can underpin the company’s next phase of growth much as the rise of PCs and smartphones helped propel Shopee and Sea’s gaming unit Garena.
Earlier in 2026, Sea released a generative-AI companion chatbot called Migoo across regions including the US, marking one of the company’s most significant steps into the technology yet. Mostly, the firm has embedded the new technology in small ways like through product recommendations and seller tools, as well as through partnerships. It joins a growing number of companies like rival Alibaba that are investing in AI to catalyse growth while competition in their core business intensifies.
Meanwhile, Shopee in June cut hundreds of developer jobs globally, or about 8 per cent of such roles in the business unit. It’s unclear if the move is directly tied to Sea’s forays into AI, but they coincide with a growing debate about the impact of the technology on jobs across the world. BLOOMBERG
