Baidu stock is down 30% in 2024 due to flat revenue and slowing cloud/AI growth

From Nasdaq: 2024-08-27 04:20:00

Baidu’s second-quarter earnings report showed nearly flat revenue and a 7% drop in adjusted earnings per ADS, missing analysts’ expectations. The stock price has fallen nearly 30% this year. Baidu faces challenges in its core online marketing business due to macro, competitive, and regulatory headwinds. Its cloud and AI growth is also slowing down.

The company’s focus on margins and buybacks might indicate business maturity, leading to concerns about keeping pace with competitors. Analysts predict minimal revenue growth for Baidu this year and a dip in adjusted earnings, making it a less favorable investment. There are better long-term plays in Chinese stocks like Alibaba and Tencent.

Investors might view Baidu as a deep value play, but caution is advised due to its challenges in key business segments and overall market conditions. The company’s efforts to stabilize its online marketing business and expand its cloud and AI division may face headwinds, impacting its future growth potential.



Read more at Nasdaq: Baidu’s Stock Is Down Nearly 30% in 2024. Is It a Value Play?