Baidu reported second-quarter revenue of 31.33 billion yuan ($4.62 billion) on Tuesday, falling short of analyst expectations as a steep decline in online advertising outpaced growth in its AI cloud business.
Revenue fell 4% from a year earlier
Analysts had forecast 31.96 billion yuan, according to Reuters. Baidu stock dropped 3.5% in premarket trading. Online marketing services brought in 13.1 billion yuan during the April-to-June period, a 19% drop compared with the same quarter last year.
Reuters attributed the trend to China’s protracted real estate slump and sluggish consumer demand, which have pushed companies to scale back their advertising outlays. Baidu’s AI-linked businesses provided a partial offset. Its Core AI-powered Business segment, covering cloud infrastructure, AI applications, and AI-native marketing services, generated 12.5 billion yuan, a 25% increase from the prior-year period and roughly half of Baidu’s overall general business revenue.