Latest news with #DeepSeek-fueled
Yahoo
21-05-2025
- Business
- Yahoo
China AI Rally Laggard Baidu Faces Low Bar for Earnings Boost
(Bloomberg) -- The current earnings season has largely been a letdown for China's big tech stocks, lowering the hurdle for Baidu Inc. to impress investors seeking a fresh angle on the artificial intelligence theme. America, 'Nation of Porches' Can Frank Gehry's 'Grand LA' Make Downtown Feel Like a Neighborhood? Chicago's O'Hare Airport Seeks Up to $4.3 Billion of Muni Debt NJ Transit Makes Deal With Engineers, Ending Three-Day Strike China's top search engine had made early advances in AI but fell behind as DeepSeek shocked the world with its low-cost model and Alibaba Group Holding Ltd. grabbed headlines as well. Baidu's shares are up 6% in Hong Kong this year, while Alibaba has surged 48% and the Hang Seng Tech Index has climbed 19%. The street has drastically lowered its view on Baidu ahead of its results due later Wednesday, with the average 12-month analyst price target for the stock down 26% over the past year. It's also now trading at a big discount relative to peers and historical levels. In a similar vein to Alphabet Inc.'s results beat last month, 'if Baidu can build a strong case that search is not an ex-growth business and GenAI can boost its existing business including search, that will make the low expectation into the earnings play in favor of the stock price,' said Xiadong Bao, a fund manager at Edmond de Rothschild Asset Management. China tech stocks have lost some steam since March's DeepSeek-fueled peak amid concerns over tensions with the US, the health of China's economy and Beijing's stimulus plans. Recent earnings from Alibaba and Tencent Holdings Ltd. underwhelmed investors looking for a new catalyst. Advertising still accounts for the bulk of Baidu's revenue, and investors will be closely watching for clear signs of improvement in the macro-dependent business. UBS AG estimates its ad revenue declined 5.7%, a smaller drop than in the December quarter. The slow ad recovery has been weighing on Baidu's shares the most, said Kai Wang, a Morningstar Inc. analyst. 'Once advertising comes back, Baidu's valuation should come up pretty quickly, as that's likely holding the AI business back,' he said. 'It's one of the few players in China that can actually build out the data centers and AI infrastructure, while its AI offerings with the Ernie model have improved.' The stock's underperformance has made it cheaper, currently trading at 8.6 times forward earnings estimates, well below its longer-term averages as well as the Hang Seng Tech Index's 16 times. On the positive side, UBS, Morgan Stanley and others expect Baidu to post robust cloud sales growth of more than 20% for the three months ended March, extending the December period's AI-driven momentum. Analysts project it will report a narrower decline in overall quarterly revenue and return to positive growth for the full year. 'Similar to other internet companies, Baidu got strong external demand after the DeepSeek launch in January, which drove cloud momentum,' Morgan Stanley analysts including Gary Yu wrote in a note. The company has benefited from 'incremental demand' from the financial, utility and energy sectors. Baidu unveiled upgrades to its flagship Ernie AI models last month that are faster and cheaper than previous iterations as it battles rivals in the increasingly competitive AI market. Looking ahead, its push into robotaxi service is seen as a potential long-term growth opportunity. For now it's all eyes on earnings. Options traders are pricing in a 5.5% move in either direction for the shares after the results, compared with an average gain or drop of 4.2% fluctuation over the past eight quarterly reports. Top Tech Stories Nvidia Corp. chief Jensen Huang called on the US to ease restrictions on the export of AI technology to China, or risk losing out on billions of dollars in revenue to up-and-coming rivals such as Huawei Technologies Co. China said it could take legal action against anyone enforcing US restrictions on using Huawei Technologies Co.'s AI chips, escalating a dispute that's upset a tentative truce on tariffs. Apple Inc. is preparing to allow third-party developers to write software using its artificial intelligence models, aiming to spur the creation of new applications and make its devices more enticing. --With assistance from Cecile Vannucci. (Adds 'Top Tech Stories' section) Why Apple Still Hasn't Cracked AI Anthropic Is Trying to Win the AI Race Without Losing Its Soul Inside the First Stargate AI Data Center Microsoft's CEO on How AI Will Remake Every Company, Including His Cartoon Network's Last Gasp ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Mint
21-05-2025
- Business
- Mint
China AI Rally Laggard Baidu Faces Low Bar for Earnings Boost
The current earnings season has largely been a letdown for China's big tech stocks, lowering the hurdle for Baidu Inc. to impress investors seeking a fresh angle on the artificial intelligence theme. China's top search engine had made early advances in AI but fell behind as DeepSeek shocked the world with its low-cost model and Alibaba Group Holding Ltd. grabbed headlines as well. Baidu's shares are up 6% in Hong Kong this year, while Alibaba has surged 48% and the Hang Seng Tech Index has climbed 19%. The street has drastically lowered its view on Baidu ahead of its results due later Wednesday, with the average 12-month analyst price target for the stock down 26% over the past year. It's also now trading at a big discount relative to peers and historical levels. In a similar vein to Alphabet Inc.'s results beat last month, 'if Baidu can build a strong case that search is not an ex-growth business and GenAI can boost its existing business including search, that will make the low expectation into the earnings play in favor of the stock price,' said Xiadong Bao, a fund manager at Edmond de Rothschild Asset Management. China tech stocks have lost some steam since March's DeepSeek-fueled peak amid concerns over tensions with the US, the health of China's economy and Beijing's stimulus plans. Recent earnings from Alibaba and Tencent Holdings Ltd. underwhelmed investors looking for a new catalyst. Advertising still accounts for the bulk of Baidu's revenue, and investors will be closely watching for clear signs of improvement in the macro-dependent business. UBS AG estimates its ad revenue declined 5.7%, a smaller drop than in the December quarter. The slow ad recovery has been weighing on Baidu's shares the most, said Kai Wang, a Morningstar Inc. analyst. 'Once advertising comes back, Baidu's valuation should come up pretty quickly, as that's likely holding the AI business back,' he said. 'It's one of the few players in China that can actually build out the data centers and AI infrastructure, while its AI offerings with the Ernie model have improved.' The stock's underperformance has made it cheaper, currently trading at 8.6 times forward earnings estimates, well below its longer-term averages as well as the Hang Seng Tech Index's 16 times. On the positive side, UBS, Morgan Stanley and others expect Baidu to post robust cloud sales growth of more than 20% for the three months ended March, extending the December period's AI-driven momentum. Analysts project it will report a narrower decline in overall quarterly revenue and return to positive growth for the full year. 'Similar to other internet companies, Baidu got strong external demand after the DeepSeek launch in January, which drove cloud momentum,' Morgan Stanley analysts including Gary Yu wrote in a note. The company has benefited from 'incremental demand' from the financial, utility and energy sectors. Baidu unveiled upgrades to its flagship Ernie AI models last month that are faster and cheaper than previous iterations as it battles rivals in the increasingly competitive AI market. Looking ahead, its push into robotaxi service is seen as a potential long-term growth opportunity. For now it's all eyes on earnings. Options traders are pricing in a 5.5% move in either direction for the shares after the results, compared with an average gain or drop of 4.2% fluctuation over the past eight quarterly reports. With assistance from Cecile Vannucci. This article was generated from an automated news agency feed without modifications to text.
Bloomberg
17-03-2025
- Business
- Bloomberg
EM Stocks Set for Best Month Since September on China Boost
Emerging market equities are set to extend their best monthly performance in six months as a rebound in Chinese shares gain momentum on more fiscal measures. The MSCI Emerging-Market Index has risen nearly 3% in March, on track for the largest monthly advance since September, driven mainly by advances in Chinese equities. After a DeepSeek-fueled rally, investors are awaiting details from a planned briefing on efforts to revive consumption that would help sustain further gains in the local market.
Yahoo
18-02-2025
- Business
- Yahoo
Baidu Shares' Gaping Underperformance in Focus as Results Loom
(Bloomberg) -- Results due Tuesday from Baidu Inc. may provide investors clues on whether the Chinese internet search leader's lagging share price performance is warranted or not. Why Barcelona Bought the Building That Symbolizes Its Housing Crisis Progressive Portland Plots a Comeback A Filmmaker's Surreal Journey Into His Own Private Winnipeg Por qué Barcelona compró el edificio que simboliza su crisis inmobiliaria How to Build a Neurodiverse City The company kicks off the China internet earnings season, which has been hotly anticipated amid the recent DeepSeek-fueled stock boom. While its Hong Kong-listed shares are up 18% from a January low, peers Alibaba Group Holding Ltd. and Tencent Holdings Ltd. have soared at least 35% on AI-related news. Baidu has been ramping up AI investments, and Apple Inc. has chosen to work with the Beijing-based company on some AI features for devices sold in China, Bloomberg News has reported. Still, Baidu has been struggling with monetization of the technology amid the nation's broader economic malaise. Analysts estimate it will report a 4.5% decline in sales for the three months through December, its worst performance since the second quarter of 2022. 'Unless there's a significant change in consumer confidence, it's hard to see their advertisement business dramatically improving,' and that is key for Baidu's valuation, said Kai Wang, an analyst at Morningstar Inc. The stock currently trades at 9.4 times forward earnings estimates, below its three-year average of 12 times. The Undocumented Workers Who Helped Build Elon Musk's Texas Gigafactory The Unicorn Boom Is Over, and Startups Are Getting Desperate Japan Perfected 7-Eleven. Why Can't the US Get It Right? The NBA Has Fallen Into an Efficiency Trap How Silicon Valley Swung From Obama to Trump ©2025 Bloomberg L.P. Sign in to access your portfolio
Bloomberg
17-02-2025
- Business
- Bloomberg
Baidu Shares' Gaping Underperformance in Focus as Results Loom
Results due Tuesday from Baidu Inc. may provide investors clues on whether the Chinese internet search leader's lagging share price performance is warranted or not. The company kicks off the China internet earnings season, which has been hotly anticipated amid the recent DeepSeek-fueled stock boom. While its Hong Kong-listed shares are up 18% from a January low, peers Alibaba Group Holding Ltd. and Tencent Holdings Ltd. have soared at least 35% on AI-related news.
