Technology has become a very important part of people’s lives. In today’s world, it is impossible to live without influence from a technology of some kind. Due to this, tech companies have become very large, and earn billions in revenue. Such influence in the market is also causing the tech industry to have a big impact on the stock markets. A crash in the tech industry has the potential to crash the entire market. Positive news in tech, however, can boost the entire market.
During the coronavirus pandemic, even technology companies have been struggling. While the impact on technology companies is less than some other industries, there is still a negative impact. Many tech companies are trying to figure out how to sustain themselves and remain profitable during this time. Baidu, the Chinese tech giant has also been facing the same problems.
Baidu Stock Rises
Despite facing some problems, Baidu stock rallied in the US markets on Monday, 18 May 2020. The stock opened at a price of 101.83 USD but then continued to rise through the day, peaking at 107.89 USD at 11:00 GMT. Baidu closed the day at 107.59 USD. This is 7.73 USD or 7.74% higher than the previous close of 99.86 USD.
Baidu Revenue Beats Market Expectations
The rise of the stock had a big reason behind it. The company had a net income of $6 Million in 2020 Q1 (January-March). Revenue during the quarter was $3.18 Billion. This is a fall of 7% compared to Q1 revenue of 2019. The company had earnings of $1.25 per American Depository Receipt (ADR). Analysts on Wall Street were expecting earnings 54 cents per ADR for the company. Since the company beat expectations by a fair margin, the stock rose fast on the market.
What Next For Baidu?
Baidu is expecting a revenue between $3.5 Billion to $3.9 Billion in 2020 Q2 (April – June). This is fairly similar to Wall Street estimates. Analysts are predicting revenue in the amount of $3.62 Billion. Baidu is likely to have a stable few months since the company is from China. China is easing lockdown measures and economic activity is returning to normal levels. Baidu is definitely going to benefit as the Chinese economy recovers.