Baidu Dips 3.42% in the US Premarket Session Despite Its Higher-than-expected Earnings

 

 

On the evening of November 21, Baidu (NASDAQ: BIDU and HKEX: 9888) released its third quarter 2024 financial report. The financial report shows quarterly total revenue of $4.78 billion, decreasing 3% year over year, and a net income of $1.09 billion, growing 14% YoY. Specifically, Baidu's core revenue in the quarter was $3.78 billion, unchanged from last year. Online marketing revenue was $2.68 billion, down 4% YoY; non-online marketing revenue driven by the AI cloud business was $$1.10 billion, up 12% YoY.

 

 

Robin Li, Baidu's founder and chief executive officer, revealed in the earnings call that the weakness in Baidu's online marketing business is offset by the growth of the AI cloud business. The growing user base of Baidu's AI model, ERNIE Bot, is a testament to Baidu's strong AI capabilities. Despite short-term pressures, Baidu maintains its AI-centric strategy and is confident in its long-term growth.

 

　

According to publicly available data, the ERNIE Bot has an average daily usage of 1.5 billion times, a 30-fold increase from the same period last year. The financial report also revealed that within the third quarter, Baidu will launch two enhanced lightweight models, ERNIE Speed Pro and ERNIE Lite Pro, to Strengthen the leadership in basic AI models.

 

Morgan Stanley released a report stating that Baidu's revenue in the third quarter met expectations and earnings were slightly higher than expected, exceeding market forecasts by about 4%. Morgan Stanley currently has a peer perform rating on Baidu, with a price target of $105.

 

As of press time on Nov. 22, Baidu slides 3.42% in the US premarket trading session.