China-based tech company Baidu (BIDU) tops third-quarter earnings estimates and remains optimistic on the roll-out of its ERNIE 4.0 artificial intelligence bot. Yahoo Finance monitors Baidu's stock action and comments on the developer's outlook as consumers adopt its AI model.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
BRAD SMITH: The Baidu seemingly reaping the benefits of its new ChatGPT style AI bots. The tech giant reporting its third quarter earnings today beating the street's expectations. Its larger strategy of setting up its own AI bot is part of a larger strategy for sustained multi-year revenue and profit expansion.
And it seems to be working. Its revenue grew 6% year over year, raking in about $4.8 billion that's higher than analysts' expectations and last month. The company unveiled its newest version of its generative AI model ERNIE 4.0, saying its capabilities were on par with ChatGPT.
I love the names that are coming out for all of these different generative AI models, the engines that many of us are perhaps going to be using on a daily basis at our fingertips.
SEANA SMITH: Yeah. ERNIE has a certain ring to it. You know, but--
BRAD SMITH: It's better than the other ones.
SEANA SMITH: If you take into account how successful it has been, there's clearly no real surprise here that their initiative here was able to offset some of that broader weakness that you were just talking about offsetting the economic downturn there. But ERNIE bot right now, 70 million users in the first 3 months. And also in terms of its capabilities, like you just said-- like you just said, really matches up, at least in their eyes, pretty well with the ChatGPT-4.
In terms of the general capability is whether or not that then continues to grow here moving forward obviously remains a question. Also, it's worth noting that the CEO of JD.com is also joining Baidu's board as an independent director there. That was also announced within this release.
But again, sales impressive when you compare it especially to some of the rivals out there and what we have heard from some of their Chinese e-commerce rivals over the last several weeks. Sales growing 6%, that was enough to top analysts' expectations and we're seeing that reaction play out in the early move this morning with gains of nearly 3%.