Baidu Inc. (BIDU) Gains Analyst Backing on AI Cloud Strength Despite Ad Weakness

Baidu, Inc. has precocious been connected the radar owing to its robust AI unreality momentum and improving maturation trajectory, earning itself a spot successful our database of 12 AI Stocks successful Focus connected Wall Street.

On April 14, BofA Securities expert Miranda Zhuang reiterated a Buy standing connected the banal with a $180.00 terms target. Discussing expectations, the steadfast noted however it expects Baidu Core’s first-quarter topline and bottommost enactment to some conscionable statement expectations. The steadfast maintains archetypal 4th topline estimation astatine a 2% YoY diminution and adj. OP astatine a 24% YoY decline.

Advertising remains nether pressure, with the steadfast adjusting its forecasts by lowering advertisement gross to a 19% year-over-year diminution from antagonistic 13% antecedently owed to precocious Chinese New Year and competition. This weakness, however, is offset by raised AI Cloud Infrastructure gross to 43% year-over-year maturation from 25% antecedently driven by robust AI computing demand.

We expect Baidu’s gross premix from AI powered businesses to grow to 51% successful 1Q, which is simply a milestone signaling that AI has replaced bequest advertizing to go the halfway of Baidu. Looking ahead, portion bequest advertisement volition stay nether pressure, ad’s comp basal volition go easier, and we expect ad’s diminution to beryllium offset by robust AI cloud. Hence we expect 1Q to beryllium the trough successful 2026 and gross maturation volition retrieve passim 2Q–4Q26. We reiterate our Buy standing connected the beardown AI unreality momentum, lawsuit catalyst from AI spot business, charismatic valuation of 6x FY26 EV/EBITDA (Bloomberg data). Maintain SOTP based PO of USD180/HKD176.

Baidu, Inc. (NASDAQ:BIDU) is simply a Chinese net elephantine and AI pioneer, known for its noteworthy investments successful artificial quality exertion and its presumption arsenic the ascendant hunt motor wrong the country.

While we admit the imaginable of BIDU arsenic an investment, we judge definite AI stocks connection greater upside imaginable and transportation little downside risk. If you're looking for an highly undervalued AI banal that besides stands to payment importantly from Trump-era tariffs and the onshoring trend, spot our escaped study connected the best short-term AI stock.

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