• Baidu will report third-quarter earnings before the U.S. markets open on Tuesday, with analysts expecting revenue and profit to decline.
• Retail investors largely consider BIDU as undervalued, while noted tech investor Cathie Wood has been accumulating the stock for several months.
• Stocktwits sentiment for the ticker is 'bullish.'

U.S.-listed shares of Baidu, Inc. (BIDU) rose 2.5% in early premarket on Tuesday, rebounding after a sharp slide over the last few days, hours ahead of the company's quarterly report. 

Revenue And Profit Expected To Decline

Analysts expect solid momentum in the company's cloud business, but its mainstay advertising business is still likely to remain under pressure amid persisting weakness in the Chinese economy.

According to consensus estimates from Koyfin, Baidu is expected to report an 8% decline in third-quarter revenue to $4.35 billion, the sharpest decline since at least the first quarter of 2022. Adjusted EPS is expected to decline 50% to $1.18.

Notably, BIDU stock has declined for five sessions straight ahead of the earnings report, falling over 12% cumulatively. The company's Hong Kong shares declined 2% on Tuesday. 

Retail's View

However, on Stocktwits, retail sentiment ticked up into the“bullish” zone from the previous day, with user commentary split between those who see the stock as undervalued and those who view Baidu's fundamentals as weak.

“$BIDU looking as a outsider everything within this company is actually in "Decline" thats why i will be shorting todays earnings,” said one user. 

A bullish user said:“Stock so undervalued. This market cap should be much higher. Patience.”

Recent Updates

Deutsche Bank analysts upgraded Baidu stock to 'Buy' and lifted their price target to $160 from $90 earlier this month, citing that the company is successfully scaling several AI businesses across cloud computing, robotaxis, intelligent search, and AI chips.

Baidu hosted its annual flagship event, Baidu World, in Beijing last week. It announced its next-gen AI mode, Ernie 5.0, which can jointly process text, images, audio, and video, along with two new AI chips, among other releases.

Meanwhile, noted tech investor Cathie Wood, CEO of Ark Invest, has been scooping up Baidu shares over the last several months. 

So far this year, BIDU has increased by 37.2%, compared to an 88.4% rise in peer Alibaba's stock and a 31.5% rise in the sectoral fund KraneShares CSI China Internet ETF (KWEB).

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