After several quarters of disappointing revenues, Baidu (NASDAQ:BIDU) is on the mend. The stock stabilized revenue by reporting flat revenue growth in Q3. Operating income fell and the company reported a GAAP loss. But the business is stabilizing, sending BIDU stock to around $125 last week.
Baidu could potentially trade at the $160 range as speculators bet on the momentum swing in its business. A sequential growth of 8% in Baidu core is due to a stabilizing market and Baidu’s efforts to strengthen its mobile ecosystem and monetization capabilities.
For example, the Baidu App achieved 56% of satisfying queries, up from 40% last year.
Unifying its mobile pillars – BJH, Smart Mini Program, managed page and DRM helped the company build its audience. Higher user engagement and audience growth will put an end to the revenue decline the company faced for many quarters.
iQIYI (NASDAQ:IQ) surged ahead last week when the company reported a 31% growth in subscribers from last year. Despite a challenging environment, IQ's’ membership services grew 30% but ad revenue fell 14%. Though it lost money in the quarter, investors are willing to buy up the stock on strong subscription growth.
Long-term, IQ stock will hold up if the company reports profits. Cash burn increased, suggesting the company did not find a sustainable path to profitability. When it eventually cuts costs, grows revenue, and sustains user growth, IQ stock will reward its investors.
