(Yicai Global) Aug. 14 – Baidu’s shares slumped in extended trading in New York afterthe leading Chinese internet search and artificial intelligence company posted a 1 percent dip in second-quarterrevenue and its iQiyi video-streaming unit revealed that it is under investigation by the US Securities and Exchange Commission.

Baidu’s stock price [NASDAQ: BIDU] fell almost as much as 7.8 percent to USD114.91 in after-hours trading. The shares changed hands for USD117.20, down 5.9 percent, as of 4.16 a.m. in New York.

Revenue was CNY26.03 billion (USD3.8 billion) in the three months ended June 30, according to the Beijing-based company’s earnings report. Net profit jumped 48 percent to CNY3.6 billion (USD518 million).

The results reflect Baidu’s relatively swift recovery from the effects of the coronavirus pandemic, buoyed by internet traffic and artificial intelligence. But the company emphasized the uncertainty the coronavirus has brought to its business.

Founder and Chief Executive Robin Li pointed to “in-app revenue [growth] in the second quarter, despite a challenging macro environment,” which “further validat[ed] our strategy to make Baidu App a super app through AI-powered building blocks and a marketing cloud platform."

Income at Baidu Core, the firm’s main search and transaction services business, was CNY18.9 billion, down 3 percent from a year earlier, but up 24 percent on the previous quarter.

For the current quarter, Baidu forecast revenue of between CNY26.3 billion and CNY28.7 billion, representing a year-on-year change of minus 6 percent to 2 percent, which assumes minus 7 percent to 3 percent at Baidu Core.

Baidu’s shares also retreated under pressure from iQiyi’s announcement that the SEC had requested certain financial and operating records along with acquisition and investment documents following claims made by Wolfpack Research. The short-seller alleged in April that iQiyi had inflated its revenue and user numbers.

Baidu owns 69.6 percent of the Netflix-like video-streaming platform operator.

Shares of iQiyi [NASDAQ:IQ] stumbled as much as 21.7 percent to USD17.82 in after-hours trading.

The company had second-quarter revenue of CNY7.4 billion, a gain of 4 percent from a year ago, it said in an earnings report released today. Its membership service climbed 19 percent, but online advertising revenue fell 28 percent.

Editor: Ben Armour