Baidu (BIDU) Stock Forecast & Price Target

Baidu's stock outlook is bolstered by its leading position in China's search engine market, capturing over 50% of market share in 2024, with 70% of core revenue stemming from online marketing services. The company's strategic focus on its AI initiatives has led to impressive growth metrics, such as a 33% year-over-year increase in AI Cloud Infra revenue, alongside a remarkable 262% surge in AI-native Marketing Services, reflecting strong demand for innovative solutions. Additionally, non-advertising revenue now constitutes approximately 40% of Baidu's core revenue, driven by robust AI Cloud growth and a deliberate transition toward subscription-based revenue models, which enhances fiscal stability and supports continued expansion.

Baidu's negative outlook is underscored by a 2% year-over-year decline in Baidu Core revenues, driven significantly by a 15% drop in advertising revenue due to the company's transition towards generative AI search, which has yet to yield substantial monetization results. Additionally, while EBITDA reported was RMB 4.4 billion, it reflects a decline in margins by 11.6 percentage points, indicating operational challenges amid shifting market dynamics. Projections indicate a continued decline in core ad revenue by 15% year-over-year, with only a modest recovery of 1% anticipated by FY26, suggesting persistent uncertainty in revenue generation from traditional advertising channels.