Baidu stock jumps after reporting a better-than-expected revenue supported by AI businesses

Shares of Baidu rose nearly 14% on Nasdaq Thursday after the Chinese internet search and AI company reported a better-than-expected quarterly revenue supported by surprising growth of its cloud and artificial intelligence businesses even during China’s Covid-19 lockdowns.

Revenue for the first quarter rose 1% to 28.41 billion yuan, the slowest growth in six quarters, but beat analysts’ average estimate.

Baidu Core, which includes Baidu’s online advertising revenue and non-advertising revenue from AI cloud and other AI-powered businesses, increased 4% to 21.4 billion yuan.

The company’s online advertising revenue down 4% year-on-year to 15.7 billion yuan.

The non-advertising revenue, includes its AI cloud and other AI-powered businesses, jumped 35% year-on-year to 5.7 billion yuan.

According to Baidu’s chief financial officer Luo Rong, Baidu’s AI cloud business grew 45% year over year in the quarter.

“Since mid-March, our business has been negatively impacted by the recent COVID-19 resurgence in China. Although Covid-19 related challenges continue to pressure our business operations, we remain confident that our AI businesses will boost the long-term growth of Baidu and contribute to China’s innovation-driven economy and sustainable development,” said Robin Li, Co-founder and CEO of Baidu.

Baidu posted a net loss of 885 million yuan, compared with net profit of 25.65 billion yuan a year earlier, driven by an economic downturn and pandemic resurgence in China.

Founded as a search engine company, Baidu has expanded into cloud services, artificial intelligence including autonomous driving and robotaxis in recent years in order to explore new revenue streams.

In April, Baidu have been given the green light to provide driverless ride-hailing services to the public on open roads in Beijing.

The permit allows Baidu to operate ten autonomous vehicles as traditional taxis in a designated area of 60 square kilometers in Beijing, making it the first company to be granted licenses by Chinese authorities to run a fully driverless service.

The license marks a significant progress for the autonomous ride-hailing industry in China from testing autonomous vehicles to allowing public passengers to ride driverless robotaxis. It is also a big step toward cars independent of human intervention.

Apollo, an open platform of Baidu’s autonomous driving technology launched in 2013, is now available in ten cities, including Beijing, Shanghai, Guangzhou, Shenzhen, Chongqing, Changsha, Cangzhou, Yangquan, Wuzhen Water Town in Jiaxing and Wuhan.