Baidu’s Hong Kong-listed shares fell 13.1% to HK$87.9 on Wednesday after the Chinese tech giant reported second-quarter results that missed analyst expectations across revenue and profitability.
The company posted total revenue of RMB 31.325 billion for the period, a 4.2% decline from the same quarter a year earlier. This marked Baidu’s fifth consecutive quarter of revenue contraction, extending a prolonged downturn in its core business segments. Net profit attributable to shareholders dropped 68.3% year-over-year to RMB 2.319 billion, reflecting the strain on margins amid elevated capital expenditures.
The company’s Online Marketing Services segment, historically its primary revenue driver, declined 19% year-over-year to RMB 13.1 billion. Competition from rivals such as ByteDance and Alibaba continued to erode Baidu’s share in the digital advertising market, analysts noted. In contrast, Baidu’s AI-driven cloud infrastructure revenue grew 50% year-over-year, while GPU cloud revenue surged 283%, underscoring the company’s pivot toward high-margin artificial intelligence services.
Baidu nearly tripled its quarter-over-quarter capital expenditure as it accelerates investment in AI compute infrastructure, a strategy that has weighed on near-term profitability. The company’s spending surge comes amid broader market headwinds, with technology stocks pressured by rising bond yields as investors reassess the impact of sticky inflation and higher interest rates on growth prospects.
The earnings miss and steep stock decline followed a Wednesday trading session in which Baidu’s shares were among the most heavily sold in the region’s tech sector.
