BIDU News
R40 coverage for Baidu, Inc. (BIDU).
R40 Coverage
Alibaba Is Selling 710 Million New Shares to Fund AI. Is Baidu Next?
The largest primary follow-on in Hong Kong's history is 710 million ordinary shares at HK$112.70 — about $10.2 billion, all of it for AI, and it covers 102% of one June quarter's capex. The obvious next question is Baidu, which is in the same race at a sixth of the scale: 35.6 quarters of cash runway against Alibaba's 10.6, and a build it has already funded with RMB 36 billion of new borrowing rather than equity.
Beijing Let 20,000 H200s In. NVIDIA's Outlook Assumes Zero China Revenue, and 20,000 Chips Is Smaller Than the Rounding on One Quarter's Guide.
The FT reports ByteDance and Tencent each received about 10,000 H200s. At any plausible price that is $0.5–0.8B against a $91.0B guided quarter — inside the ±2% tolerance on the guidance itself. Our model already carries a China case, and the gap between it and the base case is $105 a share. The question is whether 20,000 chips are a channel or a batch.
Baidu Tripled Its Capital Spending and the Rule of 40 Fell 18 Points
Baidu Q2: revenue $4.62B up 1%, non-GAAP EPS per ADS RMB7.22 against RMB9.84 expected, capex RMB11.4B — three times last year — and free cash flow of −$1.17B, the worst in our tracked window. The AI half of the company is now bigger than the legacy half. The score is −24.3, and the stock fell 9.5%.
Baidu Reports Tuesday With 13 Points of Gross Margin Gone
Baidu's gross margin has fallen from 52.5% to 38.9% over twelve quarters while revenue sat flat around $4.6B, and trailing free cash flow is now negative $1.3B. The June-quarter print on August 18 is the first read on whether the AI cloud mix shift has a floor.