Baidu will release its latest earnings this week, with the Chinese tech giant likely to update further on its AI advances.
BIDU – Daily Chart
The price of BIDU has tried to find support here at 110.60, and that could provide a base for a rally if analysts like the latest earnings.
Baidu’s previous earnings release showed a revenue beat for the quarter with a 6% year-on-year increase to 34.45 billion yuan ($4.72 billion). That was slightly higher than analyst expectations.
“Baidu reported solid third-quarter financial results, demonstrating resilience in a challenging economic climate,” Robin Li, Baidu CEO and co-founder, said at the time.
Analysts will be looking for a similar performance after the US tech giants saw growth in cloud technologies, more substantial advertising, and the release of new AI products.
Research and development expenses at the company will be watched after rising 6% to 6.1 billion year-on-year, partly due to higher data centre fees to support its Ernie bot research. That rose sharply from 1% growth in the second quarter a year ago.
Ernie bot is Baidu’s version of the AI-powered chatbot ChatGPT, which Microsoft uses. Meta and Google also have their models, which are being integrated into their product lines. Baidu only started charging for a version of the Ernie bot in November, with a price tag of $8 a month. Meanwhile, the US tech firms have begun to release premium and enterprise versions with $20-30 per user price tags.
The latest supply update on chips will also be a theme after the US previously increased its restrictions on sales of advanced semiconductors to Chinese companies, limiting their potential to develop artificial intelligence.
When asked about the restrictions, CEO Li said Baidu had “a substantial reserve of AI chips” that can allow it to keep training Ernie bot for the next year or two.
With the stock trying to find support, analysts will want to see stronger earnings and a ramp-up in plans for getting Ernie into the hands of consumers.
