To The Moon

$Baidu(BIDU)$ is scheduled to release its financial results for the first quarter of 2025, ended 31 March 2025, before the U.S. market opens on Wednesday, 21 May 2025. The management will hold an earnings conference call at 8:00 AM U.S. Eastern Time (8:00 PM Beijing Time) on the same day.

Revenue Estimates: The Zacks Consensus Estimate for revenue is projecting net sales of $4.3 billion, which represents a decrease of 1.56% from the year-ago period.

Earnings per Share (EPS) Estimates: The Zacks Consensus Estimate for Q1 2025 earnings per share is $1.96, marking a significant decline of 28.99% compared to the same quarter last year (reported EPS of $2.43 in Q1 2024). Another analyst consensus estimates a lower EPS of $1.34.

Baidu (BIDU) Last Positive Earnings Call Saw Share Price Dropped By 5.11%

Baidu had a positive earnings call on 18 Feb 2025 which saw its share price declined by 5.11% since.

The earnings call reflects a positive sentiment driven by strong growth in AI Cloud and ERNIE's performance, along with significant advancements in autonomous driving and AI-powered search. However, these achievements are partially offset by declines in online marketing and iQIYI revenues, as well as lower operating income due to one-time losses.

Baidu (BIDU) Guidance

During Baidu's fourth quarter and fiscal year 2024 earnings call, the company provided several key metrics and strategic insights. Baidu's core total revenue for Q4 increased slightly year-over-year to RMB27.7 billion. The AI Cloud business demonstrated robust momentum with a 26% revenue growth year-over-year, offsetting the softness in the online marketing business. ERNIE, Baidu's AI model, handled approximately 1.65 billion API calls daily in December, with external API calls growing 178% quarter-over-quarter.

Baidu's autonomous ride-hailing service, Apollo Go, provided approximately 1.1 million rides in Q4, marking a 36% increase year-over-year, and achieved 100% fully driverless operations nationwide. Baidu's AI innovations, particularly in areas like the AI Cloud and autonomous driving, were highlighted as areas of strategic focus, with plans to further invest in these technologies to maintain leadership in the AI sector. The company also indicated a commitment to accelerating its buyback program, having repurchased over $1 billion since the beginning of 2024.

Key Expectations and Recent Developments To Watch For Baidu (BIDU)

Full Year Guidance: For the full year 2025, the Zacks Consensus Estimates are projecting earnings of $10.08 per share and revenue of $18.8 billion, representing year-over-year changes of -4.27% and +1.65%, respectively.

AI Focus: Baidu continues to emphasize its position as a leading AI company. Investors will be keenly interested in updates on the progress and monetization of its AI initiatives, particularly its large language model, ERNIE. In April 2025, Baidu launched ERNIE 4.5 Turbo, ERNIE X1 Turbo, and a new suite of AI tools.

AI Cloud Growth: In the previous quarter (Q4 2024), Baidu's AI cloud revenue saw robust growth, accounting for 26% of the overall Baidu Core revenue. Analysts expect this trend to continue to offset potential headwinds in other segments like advertising.

Advertising Revenue: Advertising revenue has been facing macroeconomic headwinds in China. Baidu anticipates advertising revenue to turn positive in the second half of 2025, suggesting continued pressure in the first half.

Cost Optimization: Investors will be looking for updates on Baidu's efforts in cost optimization and improving operational efficiency.

Factors To Watch For Baidu (BIDU) Fiscal Q1 2025 Earnings

ERNIE and AI Integration: The adoption rate and impact of ERNIE across Baidu's various products and services will be a key focus. Any metrics or qualitative data on its usage and contribution to revenue will be important.

ERNIE handled approximately 1.65 billion API calls daily in December 2024, with external API calls growing 178% quarter-over-quarter. Apollo Go provided approximately 1.1 million rides in Q4 2024, marking a 36% year-over-year growth. It also achieved 100% fully driverless operations nationwide.

AI Cloud Performance: The growth rate of Baidu's AI cloud business and its ability to sustain momentum will be closely monitored.

AI Cloud business revenue grew 26% year-over-year in Q4 2024, contributing to a full year revenue growth of 17%. GenAI-related revenue nearly tripled year-over-year in 2024.

AI-generated content appeared in 22% of search result pages, with improved user metrics and a 2% year-over-year increase in daily search queries per user in December 2024. Wenku's subscription revenue grew 21% year-over-year, with nearly doubling of monthly active users for AI-enabled features quarter-over-quarter.

Advertising Recovery: Any indications of a recovery in the online advertising market in China and its impact on Baidu's core business will be significant. Baidu Core's online marketing revenue decreased 7% year-over-year in Q4 2024, accounting for 65% of Baidu Core's total revenues.

Smart Driving Initiatives: Progress in Baidu's autonomous driving platform, Apollo Go, including its partnerships and expansion into new regions like Abu Dhabi and Dubai, will be of interest.

Regulatory Environment: Changes in the regulatory landscape in China concerning technology and internet companies can impact Baidu's operations and future growth prospects.

Guidance for Q2 2025: Investors will pay close attention to Baidu's revenue and earnings guidance for the second quarter and any updates to its full-year outlook.

Revenue from iQIYI decreased 14% year-over-year in Q4 2024 and 8% for the full year. Operating income was RMB3.9 billion in Q4 2024, compared to RMB5.4 billion for the same period last year, impacted by one-time losses including accrual of credit losses and inventory write-downs.

Baidu (BIDU) Price Target

Based on 31 analysts from Tiger Brokers offering 12 month price targets for Baidu in the last 3 months. The average price target is $113.46 with a high forecast of $208.00 and a low forecast of $76.00. The average price target represents a 22.66% change from the last price of $92.50.

Previous analysis suggests a generally positive outlook on Baidu's long-term potential, particularly driven by its AI capabilities. However, near-term headwinds related to the macroeconomy and advertising market are acknowledged. Morningstar considers Baidu's stock to be undervalued.

Technical Analysis - Exponential Moving Average (EMA)

Baidu's stock (BIDU) has experienced some volatility but has a 52-week high of $116.25 and a low of $74.71. If we looked at how BIDU have been trading, the bulls is barely in control which RSI is indicating a weak momentum, so the concerns of whether BIDU have performed well in its AI capitalization remain to be seen.

Trading with RSI and EMA technicals, BIDU current trend is not bullish enough, we will need to see how the rest of this week and early week turned out, there might be some signs we can watch out.

We are seeing a decreased in the short interest volume, which mean that investors might be holding and not planning to take profits, or sell-off, so we might want to monitor how BIDU share price would be moving with the pause of the China trade tariffs, we are not sure how much is the impact is this on BIDU?

Summary

Baidu's Q1 2025 earnings report will be crucial in assessing the company's ability to navigate the current macroeconomic challenges while capitalizing on its AI strengths. Investors will be looking for signs of stabilization in advertising revenue, continued strong growth in the AI cloud segment, and updates on the commercialization of its AI technologies. The guidance for the upcoming quarter will also play a significant role in shaping market expectations.

Appreciate if you could share your thoughts in the comment section whether you think Baidu would be able to show progress in its AI capitalization while it navigate the current macroeconomic challenges.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.