By George Glover

Shares in Baidu were sliding on Thursday after weak advertising spending dragged down the Chinese search-engine provider's profit and revenue.

Baidu's American depositary receipts dropped 2.7% to $129.80 ahead of the opening bell. Futures tracking the S&P 500 were 0.1% lower as quarterly results from Nvidia failed to boost the broader market.

Baidu reported fourth-quarter net income of 1.78 billion yuan ($255 million) on revenue of 32.74 billion yuan. Analysts were expecting net income of 2.81 billion yuan on revenue of 32.66 billion yuan, according to a FactSet poll.

The results mark a sharp drop in both profit and revenue. A year ago, the company posted fourth-quarter net income of 5.19 billion yuan on sales of 34.12 billion yuan.

Baidu has gone all-in on artificial intelligence in recent years, launching its Ernie large-language model and plowing money into its cloud business.

Revenue for Baidu's core AI-powered business -- which includes cloud infrastructure, robo-taxis, and AI applications -- jumped 48% from a year ago to 11.3 billion yuan.

But the company said that those gains were offset by declines in its legacy advertising business, which has floundered in a tough macroeconomic environment.

China's economy has faltered in recent years, dragged down by soft consumer spending and a seemingly never-ending property downturn.

Baidu's ADRs have slumped 16% over the past month, with investors fretting about the slowdown and unsure how AI could disrupt the software industry. The S&P 500 is down 0.5% over the same period.

Write to George Glover at george.glover@dowjones.com

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February 26, 2026 07:17 ET (12:17 GMT)

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