Baidu delivered a second-quarter earnings report on Tuesday that underscored the company’s accelerating shift toward artificial intelligence while its traditional search and advertising operations continued to weaken.
Baidu shares fell 5.78% pre-market to $98.10 after closing Monday at $104.12. The move was roughly in line with options market signals that had implied a post-earnings swing of about 5.8%, or around $6 in either direction.
Second-quarter revenue came in at RMB31.3 billion, or $4.62 billion, down 4% year over year and 2% from the previous quarter. Baidu General Business revenue reached RMB25.2 billion, also down 4% from a year earlier. Online marketing services produced RMB13.1 billion, a 19% decline from the prior year, though the figure improved 4% sequentially.
The contrast with Baidu’s AI businesses was sharp. Baidu Core AI-powered Business generated RMB12.5 billion in the quarter, up 25% year over year, and represented half of Baidu General Business revenue. AI Cloud Infrastructure delivered RMB7.3 billion, up 50% from a year earlier. Within that segment, GPU Cloud revenue surged 283% year over year, accelerating from 184% growth in the previous quarter and highlighting strong demand for cloud computing capacity.
AI Applications generated RMB2.5 billion, up 3% from both the previous year and previous quarter. AI-native marketing services produced RMB2.6 billion, roughly unchanged from the same period a year earlier. Baidu also reported 644 million monthly active users for its main application in June.
Profitability remained under pressure. Baidu recorded operating income of RMB3.0 billion with a 10% operating margin. Net income attributable to Baidu reached RMB2.3 billion, and diluted earnings per ADS stood at RMB5.74. Operating cash flow remained positive for a fourth consecutive quarter, reaching RMB3.4 billion.
Baidu also continued expanding its Apollo Go robotaxi operations. The service conducted testing in London and Switzerland, launched fully driverless commercial operations in Dubai, and received permits for fully driverless testing in Hong Kong. Apollo Go has now reached 28 cities and accumulated more than 350 million autonomous kilometres worldwide, with fully driverless operations accounting for over 240 million kilometres.
The company is preparing to convert its Hong Kong presence into a dual-primary listing during 2026, with an extraordinary shareholder meeting scheduled for August 26. Baidu also returned $259 million to shareholders through share repurchases since the beginning of 2026.
