Baidu shares (HK50:9888 followed tech names lower as AI valuation concerns remain.
9888 – Daily Chart
Baidu shares fell on Friday to close at support from late-2024. That is now the key level into earnings this week.
Baidu will release its latest earnings report on Tuesday this week after an AI reveal caused a 10% drop in the share price. Investors were not impressed be the release of ERNIE 5.0, the company’s flagship AI model. There were concerns about the commercial potential of the model.
Baidu emphasized that ERNIE 5.0 is a shift in how to deploy AI tools at scale, with CEO Robin Li saying, “When you internalize AI, it becomes a native capability and transforms intelligence from a cost into a source of productivity.”
In public slides shared by the company recently. ERNIE 5.0 outperformed or matched OpenAI’s GPT-5-High and Google’s Gemini 2.5 Pro tools.
The tech firm has been active in a series of AI initiatives, including cloud and robotaxi operations. Reports showed that Baidu’s weekly robotaxi rides recently surpassed 250,000, highlighting steady progress on the company’s plans.
Baidu’s online marketing business is looking at a negative earnings cycle, with a potential 15% Q2 decline and a bleak Q3 outlook. But there are different business aspects that are positive, as the company’s in-house chip development was already winning billion-RMB contracts.
In the Q2 results, non-online marketing revenue grew by 34% over the year to RMB 10 billion. If Baidu can hold that level of growth, or maybe even lower at 20%, it could please investors enough to boost the share price.
Another key metric will be Baidu’s margins, as AI spending has been a drag on profitability in recent quarters. Investors will have to see how the stock performs around the key 115.00 level in the stock.
