Baidu’s shares tumbled 13% to HK$87.95 on Wednesday, the lowest level since August 28, 2025, after the company reported second-quarter earnings that missed market expectations despite gains in its artificial intelligence divisions.
The Chinese tech giant’s non-GAAP net income attributable to shareholders fell 16% year-over-year to CNY2.6 billion, below the CNY3.1 billion consensus estimate compiled by Visible Alpha. Revenue totaled CNY31.33 billion, also short of the CNY31.95 billion forecast.
Weakness in Baidu’s legacy businesses deepened the decline. Online marketing services revenue, historically the company’s primary revenue driver, dropped 19% from a year earlier to CNY13.1 billion. Legacy business revenue fell 23% to CNY10.4 billion, while total General Business revenue declined 4% to CNY25.2 billion.
AI-related segments showed stronger performance but were not enough to offset broader declines. Baidu Core’s AI-powered business revenue rose 25% to CNY12.5 billion, accounting for half of General Business revenue. AI Cloud Infrastructure revenue surged 50% to CNY7.3 billion, while GPU Cloud revenue jumped 283% from a year earlier.
Diluted non-GAAP earnings per ADS fell to CNY7.22 from CNY12.06 in the prior-year period, also missing the CNY9.84 consensus. The broader Hang Seng Index slipped 0.2% in thin trading, reflecting limited investor appetite for regional tech equities.
The earnings miss underscores the challenges facing Baidu as it pivots toward AI amid a prolonged downturn in its core advertising business. Investors have grown increasingly skeptical of the company’s ability to sustain growth in high-margin AI segments while traditional revenue streams contract.
