Baidu's Q4 Beat: A Mixed Bag for Investors

Baidu, Inc. (BIDU) reported its fourth-quarter and fiscal year 2024 results on Wednesday, February 18, 2025, with mixed news for investors. The Chinese internet and AI giant reported net income attributable to Baidu of RMB2.60 billion ($366 million), down 48% from last year's RMB4.95 billion. Earnings per ADS were RMB6.77 ($0.95), down 50% from last year's RMB13.59. Adjusted net income attributable to Baidu was RMB7.76 billion ($1.09 billion), compared to RMB5.37 billion a year ago. Adjusted earnings per ADS were RMB21.86 ($3.08), compared to RMB15.25 last year. In the quarter, net income attributable to Baidu Core was RMB2.4 billion ($344 million), adjusted net income attributable to Baidu Core was RMB7.5 billion ($1.06 billion). Total revenues were RMB34.95 billion ($4.92 billion), increasing 6% from prior year's RMB33.08 billion. Revenue from Baidu Core was RMB27.5 billion ($3.87 billion), up 7% year over year.

Baidu's AI Cloud business demonstrated robust momentum, with fourth-quarter revenue growth accelerating to 26% year over year, offsetting the softness in online marketing business. The company's AI chatbot, ERNIE Bot, gained significant traction after being made available for free to all users starting April 1. Baidu's autonomous ride-hailing service, Apollo Go, provided over 1.1 million rides in the fourth quarter of 2024, up 36% year over year. However, Baidu's stock price fell over 2% in pre-market trading on Tuesday, February 18, 2025, indicating that investors may still be concerned about the company's long-term prospects.



Baidu's strategic shift towards AI and its open-source approach has had a significant impact on investor sentiment and stock performance. On February 13, 2025, Baidu's stock gained after the company announced that its AI chatbot, ERNIE Bot, will be available for free to all users starting April 1. This move was seen as a positive step by investors, as it demonstrated Baidu's commitment to making AI technology more accessible and affordable. Additionally, Baidu's plans to launch a new "Deep Search" feature, designed to enhance reasoning, also contributed to the positive investor sentiment. The company's focus on AI and its open-source approach has helped to drive growth in its AI Cloud segment, which has offset losses in its online marketing business. This strategic shift has also been validated by the company's strong financial performance, with revenue beating analysts' estimates in the fourth quarter of 2024.

However, despite the positive investor sentiment, Baidu's stock price fell over 2% in pre-market trading on Tuesday, February 18, 2025, indicating that there may still be some uncertainty or concerns among investors about the company's long-term prospects. Baidu's revenue growth was primarily driven by the AI Cloud business and the success of Apollo Go, both of which outperformed analysts' expectations. However, the company's online marketing business continues to face challenges, and investors may be concerned about the potential impact of competitive pressures in Baidu's electric vehicle (EV) venture. As Baidu continues to invest in and develop its AI capabilities, it is essential to monitor the company's progress and assess any potential challenges or changes in market dynamics that could impact its performance.