China’s Baidu Inc forecast sales that topped estimates as efforts by the company to diversify into the cloud and artificial intelligence businesses start to pay off.
Revenue for the period ending in March will be 26 billion yuan (US$4 billion) to 28.5 billion yuan, compared with the 25.9 billion yuan average estimate of analysts. Sales last quarter improved by 4.8 percent, the fastest pace in 2020, fueled by a 52 percent increase in its non-advertising businesses like AI cloud.
“Our long-term commitment in technology research has made Baidu a leading AI ecology company,” founder Robin Li said after the earnings report, according to an internal memo viewed by Bloomberg News. He said Baidu’s core R&D investment was equivalent to around a fifth of its 2020 revenue.
Shares of Baidu have surged nearly threefold from their March lows as China’s rebound from the pandemic drove ad spending and the company took steps to monetize its suite of AI technologies. The stock gained by more than 3 percent in after-hours trading.