Baidu Beats Q4 Estimates, But Stock Drops 6% on AI Transition Concerns

Baidu (NASDAQ:BIDU) delivered better-than-expected fourth-quarter earnings and revenue, yet shares dropped more than 6% intra-day today, as investors weighed the company’s ongoing shift toward AI and mixed operational metrics.

For Q4, the Chinese internet and AI powerhouse reported earnings per share of RMB19.18, surpassing analyst expectations of RMB16.42. Revenue reached RMB34.12 billion, beating the projected RMB33.64 billion.

Baidu’s core business generated RMB27.7 billion, exceeding forecasts of RMB26.75 billion. However, its iQIYI streaming unit underperformed, posting RMB6.6 billion in revenue, missing the RMB6.84 billion estimate.

While Baidu continues its transformation from an internet-driven company to an AI-first enterprise, some key financial figures were mixed. Adjusted operating profit came in at RMB5.05 billion, slightly above expectations of RMB4.89 billion, but adjusted EBITDA of RMB6.95 billion fell short of the RMB7.47 billion forecast.

User growth also lagged expectations, with monthly active users reaching 679 million, below the anticipated 690.82 million. Despite the AI Cloud segment gaining traction, Baidu’s stock reacted negatively to weaker-than-expected performance in key segments and uncertainty over near-term AI monetization.