Baidu Inc. (NASDAQ:BIDU)

Baidu, Inc. (NASDAQ:BIDU) is scheduled to report its fourth quarter Fiscal 2022 results on February 22, before the market opens. The Street expects the company to post Q4 earnings of $2.01 per ADS, up 19% year-over-year. Meanwhile, revenue expectations are pegged at $4.68 billion, representing a fall of 9.8%.

It is worth highlighting that the Chinese internet search giant has surpassed the Street’s bottom-line expectations for the last 12 quarters.

Baidu’s performance in the quarter might have been supported by strength in the AI Cloud business, thanks to the rapidly growing Chinese cloud services market. Moreover, its autonomous ride-hailing service business, Apollo Go, has the first-mover advantage in China.

Nevertheless, Q4 advertising revenue and subscription growth are likely to have been impacted by COVID-19-related lockdowns in China, regulatory hurdles for Chinese tech companies, and US-China trade tensions.

Website Traffic Shows Promise

Total global visits to baidu.com climbed 13.9% year-over-year in the to-be-reported quarter. The increase in monthly visits could indicate that demand for the company’s products remained strong during the quarter.

Is BIDU a Buy?

Wall Street is cautiously optimistic about the stock. BIDU has a Moderate Buy consensus rating based on 14 Buys, five Holds, and one Sell. The average BIDU stock price target of $160.82 implies 13.5% upside potential from current levels. Shares have gained about 19% so far in 2023.

Ending Thoughts

The company’s key source of revenue, the advertising business, has been majorly impacted by inflationary pressures and economic slowdown. Nonetheless, Baidu’s efforts to diversify its operations into other profitable areas, including robotaxis and cloud business, remain impressive.