Baidu Says AI Is Now Its Core Growth Engine

Baidu, Inc. (NASDAQ:BIDU) stock rose Monday after the company reported first-quarter earnings that topped Wall Street expectations, driven by strong growth in its artificial intelligence cloud and autonomous driving businesses, even as revenue edged lower from the prior quarter. Baidu Earnings Beat Offsets Revenue Miss The company reported first-quarter revenue of $4.65 billion (32.08 billion yuan), down 1.2% year over year and slightly below analyst estimates of $4.66 billion. Adjusted earnings came in at $1.75 per American depositary share, topping consensus estimates of $1.69. AI Cloud And Marketing Businesses Drive Growth CEO Robin Li said AI has become the company's primary growth engine after Baidu's core AI-powered business accounted for more than half of Baidu General Business revenue for the first time. “In Q1, our Core AI-powered Business exceeded half of Baidu General Business revenue for the first time, marking a clear signal that AI has become the core driver of Baidu,” he said. Revenue from AI Cloud Infrastructure climbed 79% year over year to 8.8 billion yuan in the quarter, while GPU cloud revenue surged 184%. AI-native marketing services revenue increased 36% to 2.3 billion yuan. Baidu App’s MAUs reached 655 million in March 2026. Revenue from AI Applications was RMB 2.5 billion in the first quarter of 2026, approximately flat year over year. Apollo Go Autonomous Driving Expansion Accelerates The company's autonomous driving business also continued expanding. Apollo Go completed 3.2 million fully driverless rides during the quarter, up more than 120% year over year. Cumulative rides surpassed 22 million by April 2026. iQIYI Revenue Declines During Quarter Revenue from streaming platform iQIYI, Inc. (NASDAQ:IQ) declined 13% year over year to 6.2 billion yuan, missing analyst expectations. Operating Expenses Improve Amid Margin Pressure Operating expenses improved during the quarter. Selling, general, and administrative expenses fell nearly 17% year over year to $712 million, primarily due to lower expected credit losses and reduced personnel costs. Research and development expenses declined 3.6% to $635 million. Baidu's adjusted EBITDA margin narrowed to 19% from 22% a year earlier. Cash Position And Free Cash Flow Update As of March 31, 2026, the company held $40.49 billion in total cash and investments. However, free cash flow usage totaled $470 million during the quarter. CEO Highlights AI Demand And Qianfan Adoption CEO Robin Li said enterprise demand for AI training and inference workloads continues to accelerate across industries, including gaming, financial services, manufacturing, and autonomous driving. Li also highlighted growing adoption of Baidu's Qianfan MaaS platform, which now supports models beyond ERNIE, including DeepSeek, MiniMax, Kimi, and Zhipu AI. He said daily average token consumption from external customers increased nearly sevenfold year over year in March. Global Expansion Plans For Apollo Go Baidu executives also emphasized the company's global expansion plans for Apollo Go. Li said the company plans to begin open-road testing in Switzerland while preparing launches in London through partnerships with Uber Technologies, Inc. (NYSE:UBER) and Lyft, Inc. (NASDAQ:LYFT). Baidu Stock Price Action BIDU Price Action: Baidu shares were up 1.32% at $137.11 at the time of publication on Monday, according to Benzinga Pro data. Image via Shutterstock