Key Points:
- Baidu stock lost 20% of its value over the past month.
- Investors demand real financial results from the company’s heavy AI spending.
- The search giant faces fierce competition from pure AI startups like DeepSeek.
- Options traders expect a significant price swing after Thursday’s earnings report.
Baidu kicks off the earnings season for Chinese tech giants this Thursday. The company faces massive pressure after its stock price crashed 20% over the past month. This sharp drop wiped out 11 billion dollars in market value and serves as a warning for the entire industry.
Investors are losing patience with empty promises. They want to see tangible financial returns from the massive amounts of money Baidu poured into artificial intelligence over the last few years. While the company’s cloud division remains strong, Wall Street analysts expect overall revenue and profit to fall. The core advertising business continues to struggle as the broader economy slows down.
Baidu jumped into the AI race early with a popular chatbot service, but it quickly lost its lead. Smaller, focused rivals like DeepSeek now dominate the headlines. At the same time, younger internet users prefer searching for information on social apps like Xiaohongshu instead of using Baidu’s traditional search engine.
The stock market environment is also changing rapidly. Investors are pulling money out of large internet conglomerates and putting it into new AI companies like MiniMax and Zhipu. Even Baidu’s recent promise to pay its first dividend and buy back five billion dollars of stock failed to excite buyers.
Some analysts still see hope for the tech giant. A team at JPMorgan noted that Baidu’s AI tools are slowly blending into its mobile apps, which could boost efficiency. However, the options market tells a different story. Traders are buying protection against another stock drop, bracing for a wild swing in share prices the moment the earnings drop.
To survive this rough patch, Baidu must prove that businesses are actually buying and using its ERNIE AI agents. Automation tools that require less human supervision present a huge disruption risk. Without clear evidence of corporate adoption and growth, the search giant risks falling further behind in China’s ruthless technology race.
