In the stock market there is a metric that is observed almost with reverential respect. It is about Per (Price to Earnings Ratio), which It allows us to know If an action is expensive or cheap. And when we observe the technological market in China, there is a company with a worrying per: Baidu.
Fall of a giant. This Thursday Baidu has published terrible financial results: Fall of quarterly income It is the worst of the last three years and that has caused a 3% drop in the value of the shares in the Hong Kong Stock Exchange.
Source: Bloomberg.
Per worrying. Not only that: Baidu is now around 9.7, which is the least of all the companies that are in benefits in the Hang Seng Tech index (Hstech) than It serves as a reference When comparing Chinese technology companies. The action, speaking in silver, is too cheap.
The search engine loses bellows. For decades Baidu has been considered “the Chinese Google”, but over time its relevance has been blurred. The Chinese young They do not know what is to search in Baidu or Googleand have come to other ways to find answers.
Fierce competitors. Platforms such as Tiktok or Instagram have become a spectacular alternative for new generations, and in China we have seen as similar social networks –Xiaohongshu and Douyin– They are getting that. Eric Shen, analyst at the consultant Third Bridge, explained How “these rivals have created content ecosystems that seem more dynamic and attractive, which moves users of the most static and Baidu website.”
A disappointing 2025. But there is also AI. And there Baidu has a problem. Baidu’s action has lost a 3% value since the year began. The figure is surprising, especially since its competers focused on AI have a 24%win.
Where is Baidu AI? Baidu reacted relatively fast and presented its competitor to Chatgpt in March 2023. It was called Ernie, but from the beginning The performance of that model gave problems. Since then his trajectory has been irregular, and the rise of Deepseek and of Other Chinese models like Qwen (Alibaba) or Doubao (Bytedance) has put it in more and more problems in that market of “IAS Socialist”.
An AI that tries to overcome. In February Baidu wanted not to get off the revolution caused by Depseek, so he offered a free version of Ernie last April. Your last model, Ernie 4.5, It’s Open Source – initially they had adopted a proprietary model – but even that does not seem to have encouraged things for now, and there is not too much talk about their capacity: the popularity of other models such as Deepseek or Qwen is now greater. Baidu Lance Ernie 5.0 is expected at the end of August, and it will be then when we can check if this edition does compete in a specially frantic market.
Back in view? Analysts believe that Baidu’s latest strategic decisions could help her recover the good path. Among them include investments In Robotaxis And, of course, in new initiatives to boost their AI models.
Image | Baidu
In Xataka | Deepseek has given the starting gun in the race for a cheaper AI. And China starts with advantage
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