Business

Baidu Beats Q1 Revenue Estimates as AI Cloud Surge Offsets Ad Slump
By Reuters | 18 May, 2026

US-listed shares of the Chinese search-engine giant rose more than 3% in premarket trading.

China's Baidu topped market estimates for quarterly revenue on Monday, boosted by strong demand for its cloud computing services that helped offset lingering weakness in its advertising business.

U.S.-listed shares of the company rose more than 3% in premarket trading.

Tech giants in China are benefiting from strong enterprise adoption of artificial intelligence, boosting demand for cloud computing capacity required to run AI workloads. Alibaba, China's largest cloud services provider, also reported strong growth in its cloud business last week.

The strength in cloud demand has helped Baidu, China's largest search engine operator, cushion the blow from weak advertising. Companies have been cutting back spending on marketing in a challenging economy marked by an extended slump in China's property market and weak consumer demand.

Revenue from Baidu's core AI-powered business, which consists of the cloud division, AI applications and robotaxi unit, jumped 49% to 13.6 billion yuan ($2 billion), accounting for more than half the company's general business revenue.

The online advertising business reported total revenue of 12.6 billion yuan, down from 16 billion yuan a year earlier.

Total revenue in the first quarter ended March stood at 32.1 billion yuan, compared with analysts' average estimate of 31.35 billion yuan, according to data compiled by LSEG.

Net income attributable to Baidu came in at 3.45 billion yuan in the first quarter, down sharply from 7.72 billion yuan a year earlier, owing to higher costs and foreign exchange losses.

Excluding one-time items, Baidu posted a profit of 12.06 yuan per American Depositary Share, beating an expectation of 11.57 yuan.

($1 = 6.7975 Chinese yuan renminbi)

(Reporting by Deborah Sophia in Bengaluru, Liam Mo in Beijing; Editing by Pooja Desai and Kate Mayberry)