Chinese tech giant Baidu (BIDU) reported its fourth-quarter financial results, exceeding analyst expectations in earnings while falling slightly short on revenue. The company revealed earnings of RMB 21.86 ($3.04) per American depository share on sales of RMB 34.95 billion ($4.85 billion) for the December quarter. Analysts polled by FactSet had anticipated earnings of RMB 17.55 per share on sales of RMB 35 billion. Baidu experienced a 6% year-over-year increase in sales in local currency, with adjusted earnings per share surging by 43%.

Despite the positive earnings performance, BIDU stock dipped 1.2% in premarket trading, adding to a 3% decrease since the start of 2024. The company's shares have declined by 18% in the past 12 months, partially attributed to concerns regarding the Chinese economy. Baidu credited the growth of nonmarketing revenue, which rose by 9% to RMB 8.3 billion in the quarter, to its AI Cloud business.

Baidu's online marketing sales also saw a 6% year-over-year increase, reaching RMB 19.2 billion. The company reported that its app had 667 million average monthly active users in December, marking a 3% uptick from the previous year. In 2023, Baidu introduced an AI chatbot named Ernie and made progress in developing the technology.

The analysis of Baidu's stock on IBD revealed a Composite Rating of 64 out of 99 and a Relative Strength rating of 18 out of 99. The company's EPS Rating stands at 86 out of 99, indicating strong earnings growth despite stock performance. Baidu's share price struggles are in line with wider market concerns about the Chinese market outlook.