Key Takeaways
- Fourth-quarter earnings at Baidu plummeted 66% compared to last year, landing at 1.78 billion yuan and falling short of projections
- The company’s revenue decreased 4% to 32.74 billion yuan, continuing a three-quarter downward trend
- The AI segment showed strong momentum with 48% revenue growth, representing 43% of core business revenue
- The autonomous driving service Apollo Go delivered 3.4 million rides without drivers in Q4, surging over 200% annually
- The Ernie artificial intelligence platform reached 202 million monthly active users by year-end
The Chinese tech giant’s latest quarterly performance disappointed investors, leading to a 2.7% decline in its American depositary receipts to $129.80 during pre-market hours Thursday.
Earnings tumbled 66% from the previous year to 1.78 billion yuan ($259 million). Wall Street analysts had forecast 2.56 billion yuan, making this a significant shortfall.
The company’s top line contracted 4% to 32.74 billion yuan during the October-December period. This represents the third straight quarter where sales have contracted. The prior year saw Baidu generate 34.12 billion yuan in revenue alongside net income of 5.19 billion yuan.
For the complete fiscal year, the top line fell 3% while bottom-line results collapsed 76% to 5.59 billion yuan.
The disappointing financial performance stems primarily from Baidu’s advertising division, which continues to face headwinds amid challenging macroeconomic conditions. Subdued consumer demand throughout China has pressured marketing expenditures across multiple industries.
Artificial Intelligence Momentum Shows Promise
Despite the overall weakness, there were positive developments. The company’s artificial intelligence division — encompassing cloud services, self-driving technology, and AI-powered applications — saw revenue surge 48% year-over-year to 11.3 billion yuan.
This division now represents 43% of core business revenue, an increase from 39% during the previous quarter.
Cloud infrastructure powered by AI generated 34% growth, reaching 5.8 billion yuan.
The Ernie AI platform surpassed 200 million monthly active users in December. The technology is embedded within both Baidu’s mobile search application and desktop platform.
Apollo Go, the company’s robotaxi service, facilitated 3.4 million fully autonomous rides during the fourth quarter, representing growth exceeding 200% from the prior year.
Chief Executive Robin Li characterized 2025 as “a pivotal year as AI became the new core of Baidu.” While the artificial intelligence metrics demonstrate encouraging progress, they haven’t yet compensated for weakness in traditional advertising revenue.
Looking Ahead for BIDU Stock
Baidu revamped its financial reporting format this quarter to emphasize its strategic pivot toward artificial intelligence. The organization unveiled plans earlier in February for its inaugural dividend payment alongside a fresh $5 billion stock repurchase initiative.
Market observers have identified a potential public listing of Kunlunxin, the company’s semiconductor division, as a possible upside catalyst. Nomura’s research team indicated such an offering could generate investor enthusiasm given robust demand for Chinese semiconductor companies.
The ADRs have declined approximately 16% during the last 30 days and have lost more than 6% year-to-date, following a nearly 60% rally throughout 2025.
As of this report, BIDU ADRs were changing hands at $129.80, declining 2.7% in pre-market activity.
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