BIDU Earnings: Baidu Crushes Forecasts as AI Cloud Powers Past Ad Declines

Baidu (BIDU) didn’t just show up for earnings — it delivered a message. The Chinese tech firm beat Wall Street estimates in its Q1 2025 earnings released before the U.S. market opened, and it’s not because of ads. Baidu’s AI cloud business did the heavy lifting.

Baidu reported first-quarter revenue of ¥32.45 billion ($4.5 billion), beating analyst expectations of ¥30.9 billion. Adjusted net income hit ¥7.01 billion ($970 million), and Earnings Per Share (EPS) came in at ¥21.59, compared to ¥14.91 a year earlier.

Baidu’s AI Cloud Offsets Weakness in Advertising Revenue

Baidu’s traditional online advertising business brought in ¥17.31 billion, down 6% year-over-year. But that loss didn’t drag the company down. Baidu’s AI cloud services picked up the slack, growing 40% to ¥9.4 billion. The segment, which includes enterprise cloud computing, AI-powered tools, and infrastructure services, is now the company’s strongest growth engine.

This shift reflects Baidu’s strategy to evolve beyond its search roots and into the AI enterprise space. The company, also listed in Hong Kong under 9888.HK, is the developer of the Ernie AI chatbot, a central pillar in its cloud offerings.

BIDU Sees Stock Rise Before U.S. Market Opens

The earnings didn’t go unnoticed. Following the report, Baidu’s U.S.-listed shares rose more than 1.4% in premarket trading. When markets opened, the stock was up 0.21% (BIDU). Investors reacted positively to the company’s ability to outpace losses in advertising with gains in its AI infrastructure.

CEO Robin Li said the AI Cloud business was the key driver of growth, noting,
“The strong performance of our AI Cloud business underscores the growing market recognition of our distinctive strength in providing full-stack AI products and solutions with a highly competitive price-performance advantage.”

Analysts Disagree over What Comes Next for Baidu

While some see momentum, not all analysts are convinced. Smartkarma’s Ying Pan reiterated a Sell rating, citing weak advertising and margin pressures, cutting the price target to $88. But Baptista Research maintained a bullish outlook, noting Baidu’s rapid advancement in AI via ERNIE 4.5 Turbo and deployment of 30,000 Kunlun AI chips.

Is BIDU a Good Buy?

Baidu (BIDU) holds a Moderate Buy consensus from analysts, according to recent data covering the past three months. Out of five analysts, two have issued Buy ratings, while three are sitting on Hold—and none are recommending a Sell. The average 12-month price target for BIDU stands at $113.34, which implies a 27.75% upside from the current share price of $88.72. These analyst ratings are likely to change after Baidu’s stellar Q1 results today.

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