Why Baidu Stock Dropped Today

Flat quarterly growth and operating in a relatively sluggish economy took its toll Baidu (BIDU -4.40%) stock thursday American depositary shares (ADS) of the veteran Chinese technology company fell more than 4% after its latest quarterly earnings hit the news. By comparison, the S&P 500 the index fell by a relatively light 0.9% on the day.

Second quarter highs and lows

For its second quarter, Baidu posted revenue of 33.9 billion yuan ($4.8 billion), slightly lower than the just over 34 billion yuan ($4.8 billion) it he won them over the same period in 2023. What didn’t help was a decline. revenues from online marketing, an important business for the company; this fell 2 percent to just over 19 billion yuan ($2.7 billion).

Non-GAAP (adjusted) net income fell steeper than the two line items, falling 8 percent year-on-year to just under 7.4 billion yuan ($1 billion). Per-ADS, the company’s adjusted profitability was 21.02 yuan ($2.95).

That meant a mixed quarter for the expanding tech company. Analysts’ consensus estimate for revenue was 34.14 billion yuan ($4.8 billion) and adjusted net income was 18.54 ($2.60) per ADS.

Of AI and robotaxis

Baidu devoted a lot of ink to the hot technology of 2024, artificial intelligence (AI), in its earnings release. However, progress in the segment was not enough to offset the slowdown elsewhere in its business. On a brighter note, its Apollo Go robotaxi service saw a jump in volume, with about 899,000 rides during the quarter representing a 26% year-over-year improvement.