Baidu (NASDAQ:BIDU) shares climbed more than 2% in premarket trading on Monday after the Chinese technology group delivered first-quarter revenue and earnings ahead of market expectations, supported by rapid expansion in its AI-related operations.
AI-powered business becomes major revenue contributor
The company reported quarterly revenue of 32.08 billion yuan, surpassing analyst estimates of 31.49 billion yuan. Adjusted earnings per American depositary receipt reached 12.06 yuan, slightly ahead of the consensus forecast of 11.84 yuan.
Baidu said its Core AI-powered business generated 13.6 billion yuan in revenue during the quarter, representing year-over-year growth of 49%.
Meanwhile, Baidu General Business produced total revenue of 26 billion yuan and adjusted operating profit of 3.95 billion yuan.
“In Q1, our Core AI-powered Business exceeded half of Baidu General Business revenue for the first time, marking a clear signal that AI has become the core driver of Baidu,” chief executive Robin Li said in a statement.
Cloud and GPU demand accelerate sharply
The company highlighted strong momentum in its cloud operations, with cloud infrastructure revenue rising 79% year-on-year to 8.8 billion yuan in the first quarter.
Revenue linked to GPU cloud services more than tripled during the period, surging 184%.
By comparison, revenue from AI applications remained broadly unchanged at 2.5 billion yuan.
Profitability exceeds expectations despite softer iQIYI revenue
Baidu’s streaming subsidiary iQIYI reported revenue of 6.23 billion yuan, slightly below analyst expectations of 6.43 billion yuan.
Despite the softer performance from the streaming segment, Baidu still exceeded broader profitability forecasts.
Adjusted operating profit came in at 3.81 billion yuan, ahead of market expectations of 3.34 billion yuan, while adjusted EBITDA reached 5.95 billion yuan, topping forecasts of 5.23 billion yuan.