China's Baidu (9888) topped market estimates for quarterly revenue on Monday, boosted by strong demand for its cloud computing services that helped offset lingering weakness in its advertising business.
US-listed shares of the company rose more than 3 percent in premarket trading.
Tech giants in China are benefiting from strong enterprise adoption of artificial intelligence, boosting demand for cloud computing capacity required to run AI workloads. Alibaba 9988.HK, China's largest cloud services provider, also reported strong growth in its cloud business last week.
The strength in cloud demand has helped Baidu, China's largest search engine operator, cushion the blow from weak advertising demand. Companies have been cutting back spending on marketing in a challenging economy marked by an extended slump in China's property market and weak consumer demand.
Revenue from Baidu's core AI-powered business, which consists of the cloud division, AI applications and robotaxi unit, jumped 49 percent to 13.6 billion yuan, accounting for more than half of the company's general business revenue.
The online advertising business reported total revenue of 12.6 billion yuan, down from 16 billion yuan a year earlier.
Total revenue in the first quarter ended March stood at 32.1 billion yuan (US$4.72 billion), compared with analysts' average estimate of 31.35 billion yuan, according to data compiled by LSEG.
Reuters
