Baidu's AI gains not enough as Q2 revenue misses analysts estimates

Baidu (NASDAQ: BIDU) missed Wall Street’s second-quarter revenue estimate on Tuesday, August 18, reporting 31.3 billion yuan ($4.62 billion) for the three months to June, which is a 4% drop from a year earlier.

Analysts at LSEG had expected about 31.96 billion yuan, and Baidu came in under that mark. 

The company recorded a quarterly net income of 2.3 billion yuan ($324 million), which was a decline of 68% from the same time last year. The diluted earnings per American depositary share fell to $0.85, a decline of almost 72% from June 2025. Operating income also slipped to $446 million.

Investors have reacted to the development as well, as Baidu’s US-listed shares fell between 3.5% and 4.35% in pre-market trading in New York after the release.

Where did Baidu struggle?

The pressure came from Baidu’s oldest business. Online marketing revenue dropped 19% to 13.1 billion yuan, as advertisers held back spending in a weak Chinese economy.

Two forces squeezed that segment. A drawn-out slump in China’s property market and soft consumer demand pushed companies to trim marketing budgets. 

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