Baidu Inc (NASDAQ: BIDU) stock rose over 3.1% on 31st October, 2018 (as of 10:34 AM GMT-4 ; Source: Google finance) after the company reported higher-than-expected third quarter revenue as China’s biggest search engine operator places more emphasis on artificial intelligence (AI) and autonomous driving. Baidu has been investing heavily in new business lines following tighter rules in China introduced in 2016 requiring search engines to make it clear which results are paid-for ads, but has said these projects may not help boost sales growth in the near term.
Baidu’s sales momentum has lagged technology peers Alibaba Group Holding Ltd and Tencent Holdings Ltd, and it has sold or closed several businesses over the past year which were in direct competition.
Baidu forecast fourth-quarter revenue of 25.48 billion yuan to 26.72 billion yuan, lower than financial analysts’ target of 27.69 billion yuan. At the same time, Baidu has become one of China’s biggest names in AI, with its efforts endorsed by the government as well as international firms. This month, it became the first Chinese company to join an AI ethics group alongside members such as Apple Inc and Alphabet Inc’s Google.
Baidu said its AI system blocked over 430 million medical ads to combat misleading and low-quality medical advertisements in the third quarter. The stricter rules on Chinese internet advertising resulted from the death of a student who underwent an experimental cancer treatment which he found using Baidu.
BIDU in the third quarter of FY 18 has reported the adjusted earnings per share of 19.01 yuan, beating the analysts’ estimates for the adjusted earnings per share of 16.70 yuan. The company had reported the adjusted revenue of 28.2 billion yuan (US$4.11 billion) in the third quarter of FY 18, beating the analysts’ estimates for revenue of 27.53 billion yuan, according to Refinitiv data. Net income rose 56 percent from a year earlier to 12.4 billion yuan
Meanwhile, Baidu App saw strong traffic in the quarter, its daily active user number dropped to 151 million in September from a peak of 161 million reached in August. The September number was up 19 percent year-on-year. Baidu has been investing heavily in new business lines following tighter rules in China introduced in 2016 requiring search engines to make it clear which results are paid-for ads, but has said these projects may not help boost sales growth in the near term.
On the other hand, Ford Motor Co and Baidu Inc launched a two-year project on Wednesday to test self-driving vehicles on Chinese roads, amid a global race by carmakers and internet firms to develop autonomous vehicle technology.