Baidu (BIDU) Stock: Shares Rise as Q1 Earnings Exceed Analyst Expectations

TLDR

Table of Contents

Baidu reported Q1 adjusted net income of ¥7.01 billion ($970 million), exceeding analyst expectations of $682 million
Revenue rose 3% year-over-year to ¥31.51 billion ($4.36 billion), topping forecasts of $4.23 billion
Online marketing revenue fell 6% to $2.21 billion, but other core business revenue jumped 40% to $1.3 billion
The company attributed the revenue surge to its AI cloud division
Baidu’s stock rose 2.4% in premarket trading following the earnings announcement

Baidu, the Chinese search engine giant, reported first-quarter earnings that surpassed Wall Street expectations, driven largely by the strength of its artificial intelligence business. The company announced these results early Wednesday, sending its stock higher in premarket trading.

The Beijing-based tech firm posted adjusted net income of 7.01 billion Chinese yuan, equivalent to approximately $970 million. This figure handily beat analyst projections of $682 million.

Revenue for the quarter increased by 3% compared to the same period last year, reaching ¥31.51 billion ($4.36 billion). This also exceeded analyst expectations of $4.23 billion, according to FactSet.

$BIDU @Baidu_Inc beats on the big three: revenue, adjusted net income and adjusted EPS. Surprise jump in Baidu Core (search) +7% YoY. Adjusted NI & EPS declined YoY but did beat expectations. pic.twitter.com/C84mioxmIf
— Brendan Ahern (@ahern_brendan) May 21, 2025

While Baidu’s traditional online marketing revenue declined by 6% year-over-year to $2.21 billion, other segments of its core business showed impressive growth. Revenue from these other divisions surged 40% to $1.3 billion.

The company specifically pointed to its AI cloud division as the primary driver behind this growth. This performance highlights Baidu’s successful pivot toward artificial intelligence technologies.

AI Growth Offsetting Advertising Slowdown

Investors have been closely watching whether Baidu’s AI investments could counterbalance the slowdown in its advertising business. The latest results suggest this strategy is bearing fruit.

The advertising revenue decline comes amid broader concerns about consumer spending in China. Economic headwinds in the region have put pressure on many tech companies that rely heavily on advertising income.

However, Baidu’s strong showing in its AI-related businesses indicates the company is finding new revenue streams. This diversification appears to be working well for the tech giant.

The earnings report revealed that Baidu posted earnings per share of ¥18.54, which was ¥4.70 better than analyst estimates of ¥13.84. This represents a substantial earnings beat.

Baidu’s stock has shown mixed performance recently. While it was up 6% for the year as of Tuesday’s close, it has fallen 2.13% over the past three months and dropped 12.76% over the last 12 months.

Market Response and Outlook

Following the earnings announcement, Baidu’s American depositary receipts rose 2.4% in premarket trading. This positive movement came despite a broader market decline, with futures tracking the S&P 500 slipping 0.6%.

The company’s financial health score is rated as “great performance” according to InvestingPro. This assessment likely reflects Baidu’s ability to maintain profitability despite challenging market conditions.

Analyst sentiment toward Baidu has been generally positive. The company saw 6 positive EPS revisions against only 2 negative ones in the last 90 days.

This level of analyst confidence suggests that market experts see potential in Baidu’s business model and growth strategy. The company’s AI focus seems to be winning over both customers and investors.

Baidu’s results come at a time when many tech companies globally are racing to capitalize on artificial intelligence capabilities. The Chinese tech giant appears to be holding its own in this competitive landscape.

The company’s current stock price stands at ¥89.34, reflecting market reactions to both company-specific news and broader economic factors affecting Chinese tech stocks.

Baidu’s earnings report demonstrates that its investment in artificial intelligence is helping to buffer against challenges in its traditional advertising business as Chinese consumer spending slows.

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