- Instruments
- Sobre nosotros
- Por qué nosotros
Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.
Chinese tech giant Baidu, Inc (BIDU) – which bears some resemblance to Google – announced its first quarter earnings on the 21st of May this year. Despite generally good metrics, the stock slipped and continues to have a somewhat bearish flavour. The reasons for this are somewhat related to China’s overall macroeconomic outlook.
Trend AnalysisIn top and bottom line trends, the company seemingly has some cause for cheer.
Websim is the retail division of Intermonte, the primary intermediary of the Italian stock exchange for institutional investors. Leverage Shares often features in its speculative analysis based on macros/fundamentals. However, the information is published in Italian. To provide better information for our non-Italian investors, we bring to you a quick translation of the analysis they present to Italian retail investors. To ensure rapid delivery, text in the charts will not be translated. The views expressed here are of Websim. Leverage Shares in no way endorses these views. If you are unsure about the suitability of an investment, please seek financial advice. View the original at
Source: Company Information; Leverage Shares analysis
While revenues are currently trending to run flat relative to the previous Fiscal Year (FY) – which itself was lower than that in the year prior – the company continues to trend in achieving positive growth in earnings per American Depositary Share (equivalent to eight «ordinary» shares) as it did over the past two FYs.
Baidu’s «Core Segment» – which mainly provides search-based, feed-based, and other online marketing services, as well as products and services from new AI initiatives – is the heart of the company while its iQIYI segment is a streaming platform with subscription, advertising and content hosting fee revenues. Trends indicate that the «Core» remains key while «iQIYI» is trending towards remaining a drag on the bottom line in the current FY as well.
Source: Company Information; Leverage Shares analysis
While net income attributable to the «Core» largely reflects the overall trends in earnings per ADS, iQIYI is essentially trending to close the year with an 8% drop in net income despite revenues trending flat. However, the 8% drop is still better than the 62% drop in the previous FY.
In Q1 2025, «Core» represented 78% of all revenue, which is up from 73% in FY 2020. With every year, iQIYI becomes less and less relevant to the company’s bottom line – which suggests that growth from subscription fees might be tanking. Advertising is the company’s lifeblood. However, «online marketing services» – across both segments – has gone from 68% in FY 2020 to 53% in Q1 2025. Since FY 2022 through FY 2024, this share had stayed firm in the 59-60% range. If trends continue, «online marketing» is currently trending to close the current FY with a massive 12% drop in revenue relative to previous FY.
The softening of ad spends has been a primary factor in the post-earnings spiral of the ticker. Considering the near-leadership position that Baidu has in the search, online ads and map spaces, this is considered as a proxy factor that domestic consumption is deteriorating in China and yet another sign of China’s economic headwinds.
The softening of ad spends is being deemed as the driving factor in the ticker’s post-earnings spiral. Added to that is the fact is that the company continues to invest in AI projects: its latest earnings release reports that the company launched launched enhanced versions of its AI models, namely the ERNIE 4.5 foundation model and the ERNIE X1 reasoning model in April while Apollo Go – its autonomous ride-hailing service akin to Google-backed Waymo – is commencing open-road testing in Dubai, Abu Dhabi and Hong Kong. Apollo Go provided 1.4 million rides in China in Q1 2025 and stands at over 11 million cumulative rides since launch as of May 2025.
Given that the company continues to grow out these new frontiers of business, it can be expected that further expenditure on operations and research can be expected to eat into net income and earnings as the year progresses and beyond.
Market SentimentThe company is dual-listed in Hong Kong as ticker «9888», wherein it attracts volume well in excess of what its U.S. ticker does. However, prices tend to be fairly harmonized across both continents.
Source: Leverage Shares analysis
It could be seen that the swings in traded volume on a day-on-day basis are higher in the U.S. ticker. The biggest swing seen since August 2023 was in the day immediately after the earnings release on the 21st of May this year wherein a massive spike was witnessed. Given the stock dipped that day, it can be assumed that «sells» outpaced «buys». Since the Hong Kong ticker’s price dipped as well and witnessed a similar but smaller spike, it can be assumed that the same scenario was played out.
In ConclusionGiven the potential worsening of economic conditions within China as extrapolated by the softening of ad spends across Baidu’s App ecosystem, concerns over the company’s earnings strength seem somewhat justified. This outlook can be seen to have remained resilient over nine months now, despite momentary spikes centered on earnings releases as well as Apollo Go and ERNIE milestones. In a sense, the company is a victim of its environment.
However, as the management’s statements about its projects indicate, it is working on becoming an AI giant, regardless. Hence, this is essentially a fork in the road: if investors are looking into buying into the high-value world of ad spending, the ticker currently doesn’t seem it would be a solid growth investment. On the other hand, if investors are looking to buy into an «AI theme», the ticker has some potential.
However, much like in the U.S., there are competitors galore. An «AI theme» play isn’t a particularly strong one to make, given the nascent state of the industry. Consolidations and innovations are almost certain to happen and be disruptive; it’s too soon to tell if Baidu will be a clear and enduring winner. A number of spikes and troughs can be expected in the year to come.
Professional investors in Europe might like to consider the +3x Baidu Long ETP (BID3) for magnified exposure during upticks of the stock’s trajectory while the -1x Baidu Short ETP (BIUS) is the equivalent of a short position without the need for maintaining a margin.
Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.
Share this:
Centro de Trading
This is a marketing communication. Please refer to the Prospectus of the ETPs and to the KIID before making any final investment decisions.
This information originates from Investium Limited, which has been appointed as distributor of Leverage Shares products in Europe by Leverage Shares Management Company Limited (the “Arranger”). Investium Limited with registered address at 6 Nikou Georgiou Street, Office 302, 1095 Nicosia Cyprus, is a financial services provider regulated by the Cyprus Securities and Exchange Commission (CySEC).
The information is intended only to provide general and preliminary information to investors and shall not be construed as investment, legal or tax advice. Investium Limited and the Arranger (together referred as “Leverage Shares”) assume no liability with regards to any investment, divestment or retention decision taken by the investor on the basis of this information. The views and opinions expressed are those of the author(s) but not necessarily those of Leverage Shares. Opinions are current as of the publication date and are subject to change with market conditions. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results. Information provided by third party sources is believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed.
All performance information is based on historical data and does not predict future returns. Investing is subject to risk, including the possible loss of principal. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of Leverage Shares.
© Leverage Shares 2025
Never miss out on important announcements. Get premium content ahead of the crowd. Enjoy exclusive insights via the newsletter only
Never miss out on important announcements. Get premium content ahead of the crowd. Enjoy exclusive insights via the newsletter only.
INVESTOR TYPE:
LOCATION:
Spanish (EU)
Please confirm the Terms and Conditions by clicking on “I agree”.
This website is for informational purposes only.
This website is accessible to retail investors in the EU for informational purposes only. Leverage Shares does not directly distribute to retail investors. Retail clients should not rely on any of the information provided and should seek independent financial advice.
Information contained in this website is intended only to provide general and preliminary information and does not constitute any legal or investment advice, an offer to sell or solicitation to buy any security, including shares of any Exchange Traded Products (“ETPs”).
An investment in the promoted ETPs may only be made based on the ETPs´ legal documentation and will be subject to terms and conditions contained therein.
The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions. The ETPs shown on this website are not available for sale in the U.S. or to a U.S. person.
I acknowledge having my legal residence in the selected location.
Please confirm the Terms and Conditions by clicking on “I agree”.
This website is for informational purposes only.
Information contained in this website is intended only to provide general and preliminary information to EU regulated firms such as Investment Intermediaries and Asset Managers. This information does not constitute an offer to sell or solicitation to buy any security, including shares of any Exchange Traded Products (“ETPs”).
An investment in the promoted ETPs may only be made based on the ETPs´ legal documentation and will be subject to terms and conditions contained therein.
The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions. The ETPs shown on this website are not available for sale in the U.S. or to a U.S. person.
I acknowledge having my legal residence in the selected location.
Please confirm the Terms and Conditions by clicking on “I agree”.
This website is for informational purposes only.
This website is accessible to retail investors in the UK for informational purposes only. Leverage Shares does not directly distribute to retail investors. Retail clients should not rely on any of the information provided and should seek assistance from an IFA for all investment guidance and advice.
Information contained in this website is intended only to provide general and preliminary information and does not constitute any legal or investment advice, an offer to sell or solicitation to buy any security, including shares of any Exchange Traded Products (“ETPs”).
An investment in the promoted ETPs may only be made based on the ETPs´ legal documentation and will be subject to terms and conditions contained therein.
The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions. The ETPs shown on this website are not available for sale in the U.S. or to a U.S. person.
I acknowledge having my legal residence in the selected location.
Please confirm the Terms and Conditions by clicking on “I agree”.
This website is for informational purposes only.
Information contained in this website is intended only to provide general and preliminary information to FCA regulated firms such as Independent Financial Advisors (IFAs) and Wealth Managers. This information does not constitute an offer to sell or solicitation to buy any security, including shares of any Exchange Traded Products (“ETPs”).
An investment in the promoted ETPs may only be made based on the ETPs´ legal documentation and will be subject to terms and conditions contained therein.
The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions. The ETPs shown on this website are not available for sale in the U.S. or to a U.S. person.
I acknowledge having my legal residence in the selected location.
This website is intended for U.S. residents.
The content on this website is for informational purposes only and is educational in nature.
The material contained on this website is not intended as a recommendation to buy, sell or hold any security or to adopt any investment strategy.
This website is intended for U.S. residents.
The content on this website is for informational purposes only and is educational in nature.
The material contained on this website is not intended as a recommendation to buy, sell or hold any security or to adopt any investment strategy.
