Baidu (BIDU) reported upbeat financial results for Q2 ended June 30, 2021. The Chinese multinational technology company’s results were mostly driven by growth in the Artificial Intelligence (AI) business.
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Earnings per share grew 5% year-over-year to $2.39, beating consensus estimates of $2.07. Additionally, revenue was up 20% to $4.86 billion and came in above consensus estimates of $4.78 billion.
Markedly, Baidu’s core revenue rose 27% compared to the same quarter last year, helped by 71% growth in AI cloud. (See Baidu stock charts on TipRanks)
According to Baidu’s CFO Herman Yu, “Baidu’s search and feed business was solid, and we continue to execute and lead on our new AI business, including AI cloud, autonomous driving and smart assistant.”
Cash, cash equivalents, restricted cash, and short-term investments amounted to $27.87 billion at the end of the second quarter.
Looking ahead at Q3, Baidu expects revenues in the range of $4.7 billion to $5.2 billion, representing 8% to 19% year-over-year growth.
Baidu returned $566 million to shareholders under its 2020 share repurchase program and has since spent $2.5 billion on share buybacks. Additionally, the company confirmed its plans to become carbon neutral by 2030.
Yesterday, Mizuho Securities analyst James Lee reiterated a Buy rating on the stock and lowered his price target to $305 from $350, implying 91.07% upside potential to current levels.
Consensus among analysts is a Moderate Buy based on 14 Buys, 3 Holds, and 1 Sell. The average Baidu price target of $282.38 implies 76.90% upside potential to current levels.
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