Huya Shares Face Unrelenting Downward Pressure

The equity of live-streaming platform Huya continues to deteriorate sharply. Following a disappointing quarterly earnings report, the stock's decline shows no signs of abating, with technical indicators pointing toward potential further losses. Investors are left questioning whether a recovery is possible.

Market sentiment remains decidedly negative as Huya's share price persists in a clear downward trajectory. The stock recently closed at $2.79, continuing its descent. Technical analysis reveals concerning patterns: key indicators, including the Commodity Channel Index (CCI), suggest the stock is in an overbought condition, which typically serves as a sell signal. This stark contrast between the bearish chart reality and the cautiously neutral stance of analysts—who maintain a "hold" rating with a $3.50 price target—may be a source of continued volatility.

Should investors sell immediately? Or is it worth buying Huya?

Profit Plunge Overshadows Revenue Growth

The catalyst for the recent sell-off was Huya's Q3 2025 financial results. While the company posted a revenue beat, climbing 9.8% year-over-year to 1.69 billion RMB ($237.1 million), this positive headline was utterly undermined by a collapse in profitability. The adjusted net profit plummeted by 53.5% to just 36.3 million RMB. This severe erosion in earnings prompted an immediate drop of over 2% in the share price upon the report's release.

Strategic Pivot Struggles to Offset Core Weakness

In response to market shifts, Huya is attempting to diversify its business model away from a pure reliance on live streaming. Its initiatives in game-related services and advertising showed strong progress during the quarter, surging 29.6% and now accounting for over 30% of total revenue for the first time. A partnership with Kingsoft Shiyue to publish "Goose Goose Duck" in the Chinese market is intended to bolster this growth segment. However, these efforts appear insufficient to counterbalance the stagnation in its core business. Revenue from live-streaming services grew a mere 2.6%, suggesting the strategic diversification may be too late to remedy the current profit challenges.