Baidu (BIDU) Shares jumped on Tuesday after the China-based tech giant posted a smaller-than-expected decline in second-quarter revenue, as cloud sales offset continued weakness in advertising.
Baidu, often called Google (GOOGL) of China, reported third-quarter earnings of 1.49 Chinese yuan per share, beating Street’s forecast of 1.43, with sales down 5.4% from a year ago to 29, 65 billion yuan ($4.4 billion).
Revenue for the group’s AI-powered cloud division rose 31% year-on-year, Baidu said, while Baidu Core’s revenue fell 4% to 23.2 billion, spending market crashing amid China’s continued struggle to contain its Covid infection rates.
“Despite a difficult macroeconomic environment caused by Covid-19, Baidu Core generated RMB 23.2 billion in revenue in the second quarter, while Baidu AI Cloud revenue maintained rapid growth momentum of 31% from a year-over-year and 10% quarter-over-quarter,” said co-founder and CEO Robin Li.
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Baidu’s U.S.-listed shares rose 2.8% in premarket trading immediately after the earnings release to point to an opening price of $151.50 each.
The group’s earnings come amid a testing period for US-listed China-based stocks, following a decision by US lawmakers and securities regulators to remove them from US stock exchanges for non- compliance with US auditing standards.
Late last month, Alibaba Group Holdings, Asia’s most valuable technology company, unveiled plans to pursue a Hong Kong stock exchange listing that could offer it an exit from US markets.
Alibaba said it plans to list shares on the Stock Connect market in Hong Kong, a format that will allow easier access for investors in mainland China. Hong Kong Stock Exchange officials changed their listing rules earlier this year to make it easier for companies to acquire a dual primary listing, as opposed to the secondary listing that Alibaba currently uses.