Baidu Earnings Beat Expectations. Why Its Stock Is Dropping.

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Baidu

earnings topped analyst forecasts, however shares within the Chinese language tech titan slipped Thursday.

Baidu’s Nasdaq-listed shares (ticker: BAIDU) fell 3.9% after reporting a revenue of $2.39 a share, beating forecasts for $2.07, on gross sales of $4.86 billion, forward of estimates for $4.78 billion.

The doubtless cause for Baidu inventory’s drop? Baidu’s third-quarter income steering, which is forecast to return in between $4.7 billion and $5.2 billion, with a midpoint beneath the consensus $5.14 billion.

The inventory has suffered, together with lots of China’s tech corporations over the previous few months on considerations about elevated oversight from China’s authorities and delisting threats by U.S. regulators, with shares down 8% since Could.

The search engine large, which is the equal of

Alphabet

-owned Google in China, has been increasing into the synthetic intelligence area having misplaced market share in its search engine enterprise. Final 12 months it launched an autonomous taxi service in Beijing and different Chinese language cities.

Robin Li, co-founder and CEO of Baidu stated in an announcement: “Baidu Core delivered one other sturdy quarter, powered by the quick development of our new AI enterprise. AI permits companies and native governments to do extra and serve extra folks.

“We’re excited concerning the alternatives to assist completely different industries remodel their enterprise with AI and help our objective to grow to be carbon impartial by 2030.”

Second-quarter revenues grew 27% compared with the identical interval the earlier 12 months, which the corporate stated was boosted by AI cloud rising 71%.

“General 2Q21 outcomes got here in as a aid, with in-line revs and powerful revenue beat,” writes Citigroup analyst Alicia Yap.

Simply not sufficient of 1 to maintain the inventory from dropping.

Write to rupert.steiner@dowjones.com