Baidu's AI push with ERNIE models progressing, but facing competition and stock showing caution

From Nasdaq: 2025-06-26 11:03:00

Baidu, Inc.’s AI push with ERNIE models like ERNIE 4.5 and X1 Turbo show progress in reasoning and multimodal capabilities. AI Cloud revenues surged 42% year over year, accounting for 26% of Baidu Core revenues. But, ERNIE is just part of Baidu’s broader AI strategy, which includes applications like Gen AI-enhanced search and digital humans.

Baidu’s ERNIE model faces competition from Alibaba’s Tongyi Qianwen model series and Tencent’s Hunyuan model. Alibaba emphasizes versatility and ecosystem embedding, while Tencent focuses on AI-as-a-service and verticalized applications. Baidu needs to differentiate ERNIE with cost-efficient performance and real-world applications to stay ahead.

Baidu’s shares have decreased by 12% in the past three months, with a forward P/E ratio of 8.63, below the industry average. The Zacks Consensus Estimate for Baidu’s 2025 earnings per share has decreased. Baidu currently holds a Zacks Rank #5 (Strong Sell), signaling caution for investors.



Read more at Nasdaq: Baidu’s AI-Push Gains Momentum: Is ERNIE Enough to Power Ambitions?