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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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
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