FX.co ★ Baidu stocks down amid stumbles in AI market

According to analysts, Baidu shares’ growth may slow down amid snowballing troubles in the Chinese economy. Investors are raising woes about the Chinese high-tech industry. Citigroup, China International Capital, and Daiwa Capital Markets Hong Kong revised their outlooks downwards ahead of the Baidu reports. Notably, Baidu, a major Chinese technology company specializing in Internet-related services, released its results for the second quarter of 2023 on Tuesday, August 22. However, many firms braced for a cut in Baidu’s adjusted net profit. Earlier, the tech giant managed to break into the mainstream thanks to the development of the country's first ChatGPT-like artificial intelligence (AI) service. Against this backdrop, Baidu's securities soared by 13%, ranking among the top gainers in the Hang Seng Tech index this year. Meanwhile, some stick to a bearish outlook on Baidu shares. The low level of consumption in the People's Republic of China and possible difficulties related to the renewal of Baidu's artificial intelligence project cast doubt on the company's prospects. This may send the tech giant's stocks down, experts believe. Notably, Baidu’s forecasts deteriorated due to low demand for advertising products. This entailed a reduction in operating margin. Another problem is Baidu's cloud service revenue growth, which slowed down in the third quarter of 2023 due to PRC state budget cuts. However, Baidu remains China's top internet company. The tech behemoth continues to lead in the AI sector and innovation.