Baidu (BIDU) Stock Forecast & Price Target

Baidu, the leading internet search engine in China, demonstrated substantial growth in its AI-driven initiatives, with AI Cloud Infrastructure increasing 33% year-on-year to RMB 4.2 billion and AI-native Marketing Services surging 262% year-on-year to RMB 2.8 billion. Non-advertising revenue has gained momentum, now constituting approximately 40% of Baidu's core revenue, bolstered by a strong pivot towards subscription-based models and the remarkable 34% year-on-year growth in AI Cloud revenue during the first half of 2025. This strategic shift and robust performance across various tech sectors position Baidu favorably for future revenue stability and growth.

Baidu has faced a concerning deterioration in its financial performance, with core revenues dropping 2% year-over-year, driven by a significant 15% decline in advertising revenue, largely attributed to its transition towards generative AI search. Furthermore, its subsidiary, iQIYI, reported a notable 11% decrease in revenues, highlighting challenges in revenue generation outside of Baidu's core search engine business. The outlook remains grim, with projections indicating a continued 15% year-over-year decline in core ad revenue amid uncertainties surrounding the monetization of AI-driven initiatives, which adds to the overall financial instability of Baidu's portfolio.