Baidu, Inc. (BIDU)

Chinese stocks have been climbing since early this year, when DeepSeek's simpler, cheaper AI models reinvigorated interest in China's technology companies.

China's Baidu-backed semiconductor design firm Kunlunxin has won chip orders worth millions of yuan from telecoms firm China Mobile AI projects as authorities push for domestic alternatives to Nvidia.

As the global tech landscape continues evolving, companies grapple with fluctuating advertising revenues and the challenges of integrating cutting-edge technology. Baidu Inc BIDU faces hurdles and opportunities in this shifting environment.

Baidu's core search business continues to struggle, with declining online marketing revenue and increased competition from platforms like WeChat and Douyin. Despite challenges, Baidu's AI Cloud and Apollo Go businesses are growing rapidly, offering strong long-term growth potential and international expansion opportunities. The stock remains deeply undervalued, as current free cash flow is temporarily depressed by heavy investments in AI and cloud infrastructure, which should pay off over time.

Veteran Chinese tech giant Baidu (BIDU -2.59%) looked rather tired to equity investors on Wednesday. They didn't seem wowed by the company's latest earnings release and expressed this by collectively trading their American depositary shares (ADS) down by almost 3%.

Baidu, Inc. (NASDAQ:BIDU ) Q2 2025 Earnings Conference Call August 20, 2025 8:00 AM ET Company Participants Dou Shen - Executive VP & President of Baidu AI Cloud Group Haijian He - Chief Financial Officer Juan Lin - Director of Investor Relations Rong Luo - Executive Vice President of Baidu Mobile Ecosystem Group Yanhong Li - Co-Founder, Chairman & CEO Conference Call Participants Alex C. Yao - JPMorgan Chase & Co, Research Division Alicia Yap - Citigroup Inc., Research Division Gary Yu - Morgan Stanley, Research Division Xiaomeng Zhuang - BofA Securities, Research Division Lincoln Kong - Goldman Sachs Group, Inc., Research Division Thomas Chong - Jefferies LLC, Research Division Wei Xiong - UBS Investment Bank, Research Division a division of S&P - Unidentified Company Operator Hello, and thank you for standing by for Baidu's Second Quarter 2025 Earnings Conference Call.

Baidu, the company behind China's top search engine, just had its biggest drop in quarterly sales since 2022. In the second quarter of 2025, revenue fell 4% compared to last year, hitting 32.71 billion yuan ($4.56 billion), which was a little below what analysts were expecting.

Baidu stock wavered after the China search engine provider reported a Q2 earnings beat but declining sales.

Advertising sales slumped, but demand for the search-engine provider's cloud business held up thanks to the rise of artificial intelligence.

Chinese search engine giant Baidu , fell short of market estimates for quarterly revenue on Wednesday, signaling persistent weakness in the advertising market amid prolonged economic uncertainty.

BEIJING , Aug. 20, 2025 /PRNewswire/ -- Baidu, Inc. (NASDAQ: BIDU and HKEX: 9888 (HKD Counter) and 89888 (RMB Counter)), ("Baidu" or the "Company"), a leading AI company with strong Internet foundation, today announced its unaudited financial results for the second quarter ended June 30, 2025. "In the second quarter, our AI Cloud business continued to deliver robust and healthy revenue growth, supported by our strengthening full-stack AI capabilities and comprehensive end-to-end AI products and solutions.

Chinese equities are surging even as the economy shows more signs of weakness, with recent credit and activity numbers fueling worries of a deepening downturn. BofA Global Research's Helen Qiao and BNP Paribas' Jason Lui share their insights on the divergence between China's macro environment and markets on “Bloomberg: The China Show.”

A looming trade deal between the U.S. and China is bullish for the Chinese stock market. When Invesco Golden Dragon China ETF is compared to iShares China Large-Cap ETF, FXI appears to be a better choice. Seeking Alpha ETF Grades highlight the differences between PGJ and FXI.

Baidu is a value buy, overlooked amid China's AI and autonomous driving growth, offering strong GARP potential despite weak core advertising. Advertising and iQIYI revenues are under pressure, but I believe the downturn is cyclical and the ad business still has a solid floor. AI Cloud and non-marketing revenues are growing rapidly, now comprising 29% of total revenue and driving future topline growth.

BIDU eyes AI gains, but macro weakness, falling ad spend and high costs may drag Q2 earnings sharply lower.

Listen on the go! A daily podcast of Wall Street Breakfast will be available by 8:00 a.m.