Baidu Shares Edge Higher as Trading Volume Plummets to 257th Rank Amid Ad Revenue Slump and AI-Driven Recovery Efforts

Baidu (BIDU) edged up 0.11% on Sept. 3, with trading volume falling to $0.40 billion, a 40.44% drop from the previous day’s level. The stock ranked 257th in terms of daily trading activity on U.S. exchanges.

Baidu’s core advertising business continues to underperform, with online marketing revenue declining 15% year-over-year in Q2 2025 to RMB 16.2 billion. Weaker economic conditions, reduced corporate ad spending, and a sluggish property market have compounded pressure on this segment, which accounts for over half of the company’s revenue. Meanwhile, the firm’s AI-driven search transition has accelerated, with 64% of mobile search results now featuring AI-generated content by July, up from 35% in April. However, monetization of AI search remains unclear, deepening revenue challenges.

Non-advertising growth pillars, including AI Cloud and enterprise solutions, have shown resilience. AI Cloud revenue rose 27% year-over-year to RMB 6.5 billion, while non-online marketing income surged 34% to RMB 10 billion, driven by adoption of the Ernie AI model. These segments, though smaller than the ad business, have offset some of the core revenue losses. Baidu’s heavy R&D investment in AI, however, has strained profitability, resulting in negative free cash flow in Q1 and Q2 2025.

Backtest results indicate that Baidu’s stock has gained 14.2% year-to-date, outperforming broader tech indices. The firm’s forward price-to-earnings ratio stands at 10.63, below the industry average of 21.24. Analyst estimates for 2025 earnings have fallen 20.99% year-over-year, with a current consensus of $8.32 per share. The stock carries a Zacks Rank of #5 (Strong Sell), reflecting ongoing concerns about revenue diversification and AI monetization timelines.