Baidu Q3 Earnings: Advertising Slump Drags Revenue Down 7%, Cloud Growth Provides Offset

Baidu's third-quarter earnings reveal a tale of two businesses. While the Chinese tech giant's Core advertising revenue plunged 18% to 15.3 billion yuan ($2.15 billion), its cloud and AI segment surged 21% to 9.3 billion yuan. The company posted overall revenue of 31.17 billion yuan ($4.38 billion), down 7% year-over-year but beating analyst expectations.

The advertising decline reflects China's ongoing consumer spending weakness, forcing marketers to slash budgets. Meanwhile, Baidu's AI and cloud services are riding the wave of demand for large language models and development tools. This divergence highlights the company's challenging transition from search engine dominance to AI leadership.

Despite reporting a net loss of 11 billion yuan due to asset write-downs, Baidu exceeded earnings expectations with 11.12 yuan per share. The market response was muted, with U.S.-listed shares showing little movement in premarket trading.