On August 19, BIDU-SW plunged 13.8% in regular trading, trading at 88.1 HKD/share, with turnover of HKD 195 million. The sharp sell-off was triggered by a combination of disappointing Q2 results and a major investment bank downgrade.

Baidu reported Q2 total revenue of RMB 31.3 billion, down 4% year-over-year and missing the consensus estimate of RMB 31.6 billion. Non-GAAP earnings came in at RMB 7.22 per ADS, falling 22.8% short of the market estimate of RMB 9.35. Net profit attributable to Baidu collapsed 68.33% year-over-year to RMB 2.319 billion, reflecting margin pressure from elevated AI investment. Additionally, Morgan Stanley downgraded Baidu ADR to underweight with a target price of $80, further intensifying selling pressure.

While AI business revenue reached RMB 12.5 billion, accounting for 50% of core revenue, and GPU cloud grew 283% year-over-year, the market focused on overall revenue contraction and the significant earnings miss, with free cash flow turning negative at RMB -7.95 billion for the quarter.

(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)