Baidu misses Q2 revenue, AI growth offsets ad declines

Baidu reported Q2 revenue of 31.33 billion yuan, missing consensus around 31.95–31.96 billion yuan, as declines in its core advertising business offset growth in AI-linked cloud services. The company highlighted progress from its AI-powered business, with strong momentum in AI Cloud infrastructure, GPU Cloud, and AI Applications, as well as ongoing expansion of Apollo Go. Despite AI and cloud gains, online marketing remained under pressure, contributing to the revenue miss. Analysts have downgraded Baidu to Buy due to persistent ad struggles and thinner margins, even as AI and cloud growth are viewed as attractive long-term drivers. The results underscore Baidu’s strategic shift toward an AI-first model amid a challenging ad market and competitive landscape. Overall, the tone is cautiously optimistic about AI-enabled growth despite near-term headwinds.