HKEX:9888

Baidu Shares Edge Higher as AI Business Crosses Historic Threshold in Q1 2026

Baidu's stock ticked up 0.81% today after the company reported its first quarter 2026 earnings, a modest but telling market response to results that showed the company's artificial intelligence business reaching a symbolic milestone for the first time.

The headline number was a structural one. Revenue from Baidu's Core AI-powered Business exceeded RMB 13.6 billion in Q1, rising 49% year over year, and for the first time crossed the threshold of representing more than half of Baidu General Business revenue. Robin Li, co-founder and CEO, framed it plainly: AI has become the core driver of Baidu.

The engine behind the quarter was AI Cloud Infrastructure, with revenue reaching RMB 8.8 billion, up 79% year over year, and GPU Cloud revenue climbing 184% over the same period. AI-native Marketing Services brought in RMB 2.3 billion, up 36%, while AI Applications came in at RMB 2.5 billion, roughly flat year over year.

Total revenue came in at RMB 32.1 billion, or approximately $4.65 billion. Net income attributable to Baidu was RMB 3.4 billion, with diluted earnings per ADS of $1.27, or $1.75 on a non-GAAP basis. Operating cash flow remained positive at RMB 2.7 billion, which CFO Haijian He pointed to as a sign of improving operational efficiency.

Apollo Go delivered 3.2 million fully driverless rides in Q1, up more than 120% year over year, with cumulative public rides now exceeding 22 million across 27 cities globally. ERNIE 5.1, launched in May 2026, ranked first among Chinese models on the LMArena text leaderboard and fourth globally.

The 0.81% gain reflects a market that sees Baidu's AI transformation as real but not surprising, with the stock having already appreciated significantly heading into the report.
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Author
European Investor 05-18-26