Since our last coverage of Baidu (NASDAQ: BIDU) in August 2024

This year, BIDU stock hovered two times, in February and mid-March, around $100 per share price level.

Since our last coverage of Baidu (NASDAQ:BIDU) in August 2024, the stock price level is now slightly higher, at $89.53 from $86.96 per share.

However, within that period, there have been multiple opportunities to lock in high profits.

Just over a month later in early October, BIDU shares reached a $115 yearly top. This year, BIDU stock hovered two times, in February and mid-March, around $100 per share price level.

As a repeat performer, the “Google of China” is clearly worth considering for Big Tech exposure from the East, one that is still much cheaper than the likes of Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOG).

The latest Baidu earnings for Q1 2025 delivered on Wednesday showcase continued growth, as the company beat revenue estimates.

Although there is more than earnings to consider when it comes to Baidu, let’s first see the quarterly financial performance.

AI Cloud Boost Headed by ERNIE

At reported 32.45 RMB ($4.47B), Baidu beat FactSet’s expected revenue of 32.45 billion yuan. Year-over-year, this is 3% revenue improvement. The company’s net income to Baidu Core grew by 48% in that period to $1 billion.

However, when excluding non-recurring items, as a non-GAAP measure, Baidu’s net income is $872 million, down 4% year-over-year.

Similar to Alphabet, Baidu Core consists of AI Cloud, Mobile Ecosystem and Intelligent Driving & Other Growth Initiatives (iQIYI). Ad revenue is still the company’s largest revenue source, down 6% to 16 billion yuan ($2.21B) year-over-year.

Baidu’s AI Cloud showed the largest growth, at 42% yoy. Like Google and Amazon, Baidu offers full-stack service for enterprises. Covering both front-end and back-end aspects of AI deployment, otherwise known as full-stack, Baidu designs its own Kunlun AI chips, as well as having the PaddlePaddle deep learning framework.

On top of those full-stack layers, Baidu offers ERNIE foundation large language models (LLMs). The latest iteration, ERNIE X1 Turbo, matches the performance of Chinese rival DeepSeek R1, as well as OpenAI’s o1.

According to various news reports, ERNIE 4.5 Turbo is 2x faster than its predecessor with just 20% of the cost. In turn, this model is just 0.2% – 1% of ChatGPT 4.5’s cost, having cut prices by 80% for the Turbo model in April. Suffice to say, this creates an enormous cost-efficiency advantage for China’s businesses.

As a multi-modal LLM, ERNIE is suited for a wide range of uses: image and audio analysis, document summary, image generation, textual and mathematical reasoning. Following China’s price-slashing strategy in other endeavors, from EVs to Temu’s cheap product deliveries, it is clear that Baidu aims to become the go-to place for AI app deployment.Join Our Telegram Group