Baidu misses Q2 revenue estimates

Baidu reported second-quarter revenue of 31.33 billion yuan ($4.65 billion), a 4% decline year-over-year and below the analysts' average estimate of 31.96 billion yuan compiled by LSEG. The miss was driven by a 19% drop in online marketing services revenue to 13.1 billion yuan, as a prolonged downturn in China's property sector and weak consumer spending led businesses to cut marketing budgets. Advertising demand also suffered from e-commerce platforms redirecting promotional budgets toward user subsidies during the 618 shopping festival. In contrast, Baidu's AI-related businesses, including cloud computing and AI applications, grew 25% year-over-year to 12.5 billion yuan. Despite this growth, Baidu has fallen behind Chinese rivals such as ByteDance and Alibaba in the AI race, with its Ernie large language model lacking major upgrades. The company's U.S.-listed shares fell 3.5% in premarket trading following the announcement.