Baidu Q3: 6% Topline Growth, Prioritizing AI Investments, ERNIE 4.0 Launch & More
Portfolio Pulse from Anusuya Lahiri
Baidu, Inc (NASDAQ: BIDU) reported a 6% year-on-year increase in Q3 FY23 revenue to $4.72 billion, missing estimates by $0.07 billion. Adjusted earnings per ADS of $2.80 exceeded expectations by $0.48. Baidu Core and online marketing revenues grew by 5%, while non-online marketing, including cloud and AI businesses, increased by 6%. IQIYI, Inc (NASDAQ: IQ) saw a 7% revenue increase to $1.10 billion, slightly below the $1.12 billion consensus. Baidu's SG&A and R&D expenses rose, with a focus on AI investments like ERNIE 4.0. The company has $27.8 billion in cash and generated $822 million in free cash flow. BIDU shares rose 2.12% in premarket trading.
November 21, 2023 | 10:42 am
News sentiment analysis
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POSITIVE IMPACT
Baidu's Q3 revenue growth and EPS beat, along with the launch of ERNIE 4.0 and strong AI focus, may positively influence investor sentiment despite a slight revenue miss.
The positive earnings per share beat and the launch of ERNIE 4.0, coupled with the premarket stock price increase, suggest a short-term positive impact. The revenue miss is a concern but seems offset by the overall growth and AI initiatives.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
NEUTRAL IMPACT
IQIYI's revenue growth of 7% to $1.10 billion, despite missing consensus estimates, along with an increase in subscribing members, may have a neutral to slightly positive impact on the stock.
IQIYI's revenue growth is positive, but the miss on consensus estimates could temper investor enthusiasm. The increase in subscribers is a good sign for future revenue potential.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70