Baidu's AI Ambitions Face Challenges Amid Revenue Decline and Competitive Pressures

Baidu: AI Leadership In Question Amid Macroeconomic, Competitive Pressures

Given the stagnating growth outlook and ongoing investment pressures, I recommend avoiding BIDU and favoring stronger Chinese internet companies like PDD and Meituan. Baidu (NASDAQ:BIDU) reported a largely in-line 4Q24 with Baidu Core revenue ahead of consensus by RMB1bn while revenue from the online video site IQIYI missed by RMB 200mn. The shares sold off after the print Astrada Advisors delivers actionable recommendations that enhance portfolio performance and uncover alpha opportunities, supported by a strong track record in investment research at leading global investment banks. With expertise spanning technology, media, internet, and consumer sectors in North America and Asia, Astrada Advisors excels in identifying high-potential investments and navigating complex industries.Leveraging extensive local and global experience, Astrada Advisors offers a unique perspective on market developments, regulatory changes, and emerging risks. The research integrates rigorous fundamental analysis with data-driven insights, providing a nuanced understanding of key trends, growth drivers, and competitive landscapes.The focus is empowering investors with timely research and a comprehensive view of industry dynamics. Whether navigating volatile markets or exploring new trends, Astrada Advisors remains committed to delivering superior insights to drive informed investment decisions. Analyst's Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Baidu Q4 Earnings: AI Cloud Grows, Margin Slides, Expects AI Investments To Bear Fruit In 2025 - Baidu (NASDAQ:BIDU)

On Tuesday, Baidu, Inc (NASDAQ: BIDU) reported fiscal fourth-quarter revenue of $4.68 billion, down 2% year-on-year, topping the analyst consensus estimate of $4.56 billion. Baidu's adjusted earnings per ADS of $2.63 beat the analyst consensus estimate of $1.78. The stock price slid after the report. Also Read: Applied Materials Navigates China Slowdown, Analysts See Early Recovery Despite Soft Guidance Segments: Baidu's Core revenue grew by 1% year over year to $3.8 billion; Online marketing revenue declined by 7% year over year to $2.46 billion. Non-online marketing revenue grew 18% year over year to $1.34 billion, driven by the AI Cloud business. AI Cloud business grew by 26% during the quarter. Revenue from IQIYI, Inc (NASDAQ: IQ) decreased 14% year over year to $906.00 million, missing the analyst consensus estimate of $909.96 million. Baidu's SG&A expenses were $915 million, up 14% year over year, primarily due to an increase in expected credit losses, channel spending, and promotional marketing expenses. R&D expenses declined 12% year over year to $756 million. Baidu's adjusted EBITDA margin declined by 600 bps to 20%, and its Core adjusted EBITDA margin decreased by 600 bps to 24%. As of December 31, 2024, Baidu had $19.1 billion in cash and equivalents and generated $3 million in free cash flow during the quarter. Co-founder and CEO Robin Li said 2024 marked a pivotal year in the company's transformation from an internet-centric to an AI-first business. AI Cloud gained momentum, fueled by broad market recognition of its full-stack AI capabilities. In the Mobile Ecosystem, Li noted that it was steadfast in advancing the AI transformation. Apollo Go paved the way for global expansion and scalable, asset-light strategies. Li expects its AI investments to deliver more significant results in 2025. Baidu stock declined 8% in the last 12 months as its AI models failed to gain traction, like Alibaba Group Holdings BABA, ByteDance, and DeepSeek. The Chinese search engine giant plans to launch Ernie 5.0 in late 2025 and offer Ernie Bot free to all users. Baidu is also a key Apple Inc AAPL partner as the latter aims to add AI features to its iPhones for China. Price Action: BIDU stock traded lower by 2.29% at $95.25 premarket at the last check Tuesday. Also Read: Nvidia Shifts Strategy, Boosts WeRide Investment, Trims Arm Stake Photo by Sundry Photography via Shutterstock BIDUBaidu Inc$95.50-2.03%Overview Rating:Good75%Technicals Analysis660100Financials Analysis800100WatchlistOverviewAAPLApple Inc$244.950.14%BABAAlibaba Group Holding Ltd$128.462.99%Market News and Data brought to you by Benzinga APIs

Baidu's falling ad revenue streak and CEO's absence from tech symposium weighs on stock (BIDU:NASDAQ)

Create a free Seeking Alpha account to access breaking news and valuable research tools " Chinese internet search giant Baidu (NASDAQ:BIDU) reported a hat trick of advertising revenue declines on Tuesday, which stole the spotlight from its decent top and bottom line beat in its fourth quarter earnings report. Shares of the company are down 7% in early open market trading in the U.S. Results are also being overshadowed after CEO Robin Li missed the tech symposium held in China for business tycoons that aimed to boost private sector sentiment during the U.S. federal holiday on Monday. Hong Kong-listed shares of Baidu were down 8% yesterday, wiping off more than $2B from its market cap. The meeting was chaired by President Xi Jinping, and in attendance were Alibaba's (BABA) Jack Ma, DeepSeek CEO Liang Wenfeng, Xiaomi's (OTCPK:XIACY) Lei Jun, Tencent's (OTCPK:TCEHY) Pony Ma, Huawei founder Ren Zhengfei, and BYD's (OTCPK:BYDDY) Wang Chuanfu. Executives from Baidu and ByteDance (BDNCE) were not present, according to media reports. In Q4, revenue from Baidu Core was up only 1%, while online marketing revenue was down 7%. However, non-online marketing revenue rose 18%, mainly driven by its AI Cloud business, the company said. Revenue from its sister company iQIYI was down 14%. Online marketing revenue was down 4% in the third quarter and 2% in the second quarter of 2024. "Our AI Cloud business demonstrated robust momentum with fourth-quarter revenue growth accelerating to 26% year over year, offsetting the softness in online marketing business. While navigating near-term pressures, we are confident that our strategic AI investments will drive meaningful progress and foster long-term success," interim CFO Junjie He said. Baidu's autonomous ride-hailing service made 1.1 million rides in Q4, up 36%. In December, Baidu App's MAUs reached 679 million, up 2% year over year. Under the AI Cloud segment, ERNIE handled about 1.65B API calls daily in December 2024, with external API calls nearly tripling from the third quarter in Q4. Net income for the quarter was RMB 5,192M or RMB 14.26 per share, compared to RMB 2,599M or RMB 6.77 per share a year earlier. On a per-share basis, the company earned RMB 19.18, or $2.63 per share, while revenue declined 2% to RMB 34,124M, or $4.67B. More on Baidu Baidu: Well Placed To Benefit From DeepSeek Hype Baidu: Big AI Upside With Downside Protection Baidu: The AI Catalyst I've Been Waiting For Is Finally Here (Rating Upgrade) Biggest stock movers Tuesday: INTC, DAL, STZ, HEES, and more Baidu Non-GAAP EPADS of $2.63 beats by $0.78, revenue of $4.67B beats by $70M Stay Ahead with Timely Insights from Seeking Alpha Register now to get breaking stock news and investor-led analysis -- helping you make informed decisions at the right time.

Baidu's AI Cloud, Robotaxi Growth And Accelerated Buybacks Position It For Strong 2025: Analyst - Baidu (NASDAQ:BIDU)

Benchmark analyst Fawne Jiang reiterated Baidu BIDU with a Buy rating and a $130 price target. Jiang was surprised by the pressure on Baidu's stock yesterday despite a generally in-line quarter with an upsized beat in AI Cloud growth. The analyst remains a firm believer in the accelerating adoption of generative AI in China in fiscal 2025, catalyzed by DeepSeek's breakthroughs, and views full-stack service providers like Baidu as key beneficiaries of this trend, with cross-selling monetization opportunities against a highly competitive environment. Also Read: Analog Devices Beats Q1 Estimates, Raises Dividend As Automotive Revenue Declines Baidu's decision to open-source its upcoming ERNIE 4.5 series and offer ERNIE Bot for free access should further drive broader adoption. While Jiang acknowledged market concerns surrounding search, management has guided for a gradual recovery in ad growth, with a return to growth expected in the second half. Additionally, the integration of generative AI in search presents new monetization opportunities, particularly in transaction-based verticals. The analyst acknowledged the global challenge of search engines competing against new traffic gateways (Chatbot) yet noted that it's still too early to discount Baidu's efforts to transform its search business through AI. Along with minimum asset value recognition in robotaxi and the expected acceleration of share buybacks, he noted an attractive risk/reward profile for Baidu stock. With the expected growth in generative AI adoption, the analyst raised his fiscal 2025 Cloud growth projection to 20% (versus 17% prior). Jiang noted that search engines globally are facing ongoing debates about rising competition from Chatbot as new user gateways, yet indicated that Baidu's decision to make its ERNIE Bot free should help to level the playing field. On the monetization front, the analyst noted that the company will prioritize user experience but nevertheless sees viable monetization opportunities, especially in Agent. AI Agent's strength in mastering complex, non-standardized service portfolios is conducive to transaction-based verticals, which Baidu has largely exposed to. In light of anticipated monetization in the second half, Jiang left his fiscal 2025 core ad growth projection unchanged at flat. Baidu plans to focus on scaling its domestic robotaxi operations, exploring asset-light operating models, and expanding its international presence. While Apollo Go operates at a comparable scale as Waymo in terms of quarterly rides completed, there's minimal or no asset value reflected in the stock, which the analyst noted presents an attractive optionality for investors; admittedly, valuation catalysts remain to be materialized. Regarding capital allocation, Baidu is committed to advancing its AI capabilities and has pledged to accelerate its buyback program in fiscal 2025 to enhance shareholder returns. Jiang projected fiscal 2025 revenue of $19.033 billion and EPS of $11.81. He expects fiscal 2026 revenue of $20.098 billion and EPS of $12.95. Price Action: BIDU stock is down 2.30% at $88.09 at last check Wednesday. Also Read: Fiverr Beats Estimates In Q4, Projects AI-Powered Expansion And Rising Buyer Spend Image by testing on Shutterstock BIDUBaidu Inc$88.17-2.21%Overview Rating:Good75%Technicals Analysis660100Financials Analysis800100WatchlistOverviewMarket News and Data brought to you by Benzinga APIs

Baidu Profit Doubles, Revenue Falls Less Than Expected -- Update

China's Baidu reported lower revenue for the third straight quarter but doubled its profit as the search-engine giant's growing AI business partly offset weak advertising demand. The Beijing-based internet company said Tuesday that fourth-quarter revenue fell 2.4% to 34.12 billion yuan, equivalent to $4.70 billion, better than analysts' estimates for a nearly 5% drop. Net profit soared to 5.19 billion yuan from 2.60 billion yuan, beating the 3.75 billion yuan expected by analysts in a FactSet poll. "Our AI Cloud business demonstrated robust momentum with fourth-quarter revenue growth accelerating to 26% year over year, offsetting the softness in online marketing business," said Junjie He, Baidu's interim chief financial officer. "While navigating near-term pressures, we are confident that our strategic AI investments will drive meaningful progress and foster long-term success." The Chinese tech company said last week that it would make its AI chatbot free for mobile and desktop users starting in April amid growing competition in China's rapidly expanding AI industry. Baidu's Ernie Bot, once the most eye-catching AI chatbot in China, has witnessed its popularity fade slightly, especially after Chinese upstart DeepSeek caught global attention in late January. Ernie Bot's monthly active users ranked fourth in January among Chinese chatbots, according to aicpb.com, a Chinese website that tracks AI products. ByteDance's Doubao was No. 1, followed by DeepSeek, the site showed. Baidu said in the earnings release that its Ernie Bot shows "strong momentum" and handled 1.65 billion API calls daily in December. Still, given that search remains Baidu's core business, analysts are closely watching the development of Baidu's AI search, which could give the company's advertising revenue a much-needed boost. Besides AI, Baidu has diversified into other areas, investing in cloud computing and self-driving technology as it searches for its next growth driver. In November, the company's Apollo Go robotaxi service was granted permits to conduct autonomous-driving tests on Hong Kong's public roads. More broadly, Beijing has recently indicated more support for the tech industry, a shift from its attitude several years ago when China cracked down on the sector's biggest companies. On Monday, President Xi Jinping met with leading technology entrepreneurs and CEOs, a move signaling that Beijing needed the private sector to deliver economic growth and self-sufficiency. Baidu's American depositary receipts slipped 2.2% in premarket trading after the results.

Baidu's Robotaxi Service Hits 1.1 Million Paid Rides In Q4, Expands To Hong Kong As 1st Operator Allowed To Test Autonomous Vehicles - Alphabet (NASDAQ:GOOG), Baidu (NASDAQ:BIDU)

The Future Fund Managing Partner Gary Black highlighted key metrics from Baidu Inc.'s BIDU autonomous driving progress, noting that the company's robotaxi service achieved 1.1 million paid rides in the fourth quarter of 2024, jumping 36% year-over-year, according to his post on X. What Happened: Black emphasized three critical developments: the service's transition to 100% fully driverless operations with no remote operators, a cumulative total of 9 million robotaxi rides, and Baidu's groundbreaking entry into Hong Kong as the first ride-hailing operator permitted to test its autonomous platform there. The Hong Kong expansion in November marks Baidu's first venture into a right-hand drive, left-hand traffic market, demonstrating the platform's adaptability to different driving environments. During the earnings call, CEO Robin Li underscored the company's decade-long investment in autonomous driving technology, noting that Apollo Go operates in "one of the most challenging environments" due to complex traffic conditions in China. The company deploys its sixth-generation autonomous vehicle, the RT6, specifically designed for robotaxi operations. See Also: Grab Stock Is Up 52% Over The Past Year, But Investor Adam Khoo Warns Of Weak 'Economic Moat' And Growth Limits Why It Matters: Baidu plans to accelerate its growth through an asset-light approach, partnering with mobility service providers and local entities for efficient scaling. This expansion comes as the company competes with Tesla Inc. TSLA and Alphabet Inc.'s GOOGL GOOG Waymo in the autonomous vehicle space. The robotaxi milestone accompanied Baidu's broader fourth-quarter results, where the company reported revenue of $4.68 billion, exceeding analyst estimates despite a 2% year-over-year decline. The company's AI Cloud business showed particular strength, growing 26% during the quarter. Read Next: Bitcoin, Ethereum, Dogecoin Slide As Stocks Rally: Analyst Spots 'Good Sign' For ETH's Mid-Term And Long-Term Price Outlooks Image Via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. BIDUBaidu Inc$90.890.81%Overview Rating:Good75%Technicals Analysis660100Financials Analysis800100WatchlistOverviewGOOGAlphabet Inc$186.000.11%GOOGLAlphabet Inc$183.960.10%TSLATesla Inc$353.83-0.08%Market News and Data brought to you by Benzinga APIs

China's Baidu reports fourth-quarter revenue above estimates

Feb 18 (Reuters) - Search engine giant Baidu (9888.HK), opens new tab, beat quarterly revenue estimates on Tuesday, indicating some recovery in the Chinese advertising market. Baidu has offset losses through its AI Cloud segment's growth, and in a strategic shift amid intensifying competition, announced last week that its next-generation AI model Ernie will become open-source from June 30. Baidu's online marketing business, which contributes the majority of its revenue, stood at 19.34 billion yuan ($2.66 billion). Analysts had estimated 19 billion yuan. But its revenue that does not depend on online marketing rose 18% to 9.8 billion yuan, largely driven by its AI Cloud business. The company reported a revenue of 34.12 billion yuan for the fourth quarter, beating analysts' estimate of 33.32 billion yuan, according to data compiled by LSEG. Baidu's U.S.-listed shares were down about 2% in premarket trading. ($1 = 7.2770 Chinese yuan renminbi) Reporting by Akash Sriram in Bengaluru and Yelin Mo in Beijing; Editing by Sonia Cheema Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Technology

China's Baidu reports fourth-quarter revenue above estimates

Feb 18 (Reuters) - Search engine giant Baidu beat quarterly revenue estimates on Tuesday, indicating some recovery in the Chinese advertising market. Baidu has offset losses through its AI Cloud segment's growth, and in a strategic shift amid intensifying competition, announced last week that its next-generation AI model Ernie will become open-source from June 30. Baidu's online marketing business, which contributes the majority of its revenue, stood at 19.34 billion yuan ($2.66 billion). Analysts had estimated 19 billion yuan. But its revenue that does not depend on online marketing rose 18% to 9.8 billion yuan, largely driven by its AI Cloud business. The company reported a revenue of 34.12 billion yuan for the fourth quarter, beating analysts' estimate of 33.32 billion yuan, according to data compiled by LSEG. Baidu's U.S.-listed shares were down about 2% in premarket trading. ($1 = 7.2770 Chinese yuan renminbi) (Reporting by Akash Sriram in Bengaluru and Yelin Mo in Beijing; Editing by Sonia Cheema)

Baidu's Revenue Slides After Chinese AI Rivalry Heats Up

Baidu Inc. reported a smaller-than-expected revenue drop, alleviating concerns its internet search and artificial intelligence businesses are buckling under fierce competition. Revenue for the three months ended December shrank 2% to 34.1 billion yuan ($4.7 billion), versus an average estimate of 33.4 billion yuan. Net income for the same period came to 5.2 billion yuan, compared with a projected 3.92 billion yuan.