Susquehanna Raises Baidu Price Target to $140 on AI Cloud Surge. Why Still Neutral?

Susquehanna raised its terms people connected Baidu (NASDAQ:BIDU) to $140 from $120 portion maintaining a Neutral rating, a terms people rise that captures some the bull lawsuit and the unfastened questions surrounding the Chinese hunt and AI giant. The telephone follows Q1 2026 results released May 18, wherever AI Cloud momentum collided with continued weakness successful bequest advertising.

The hostility successful this telephone is the story. If AI Cloud Infra is accelerating truthful rapidly, wherefore isn't Baidu banal a Buy? Susquehanna's answer: declines successful the bequest online selling concern proceed to offset the AI growth, leaving shares apt rangebound adjacent with an undemanding valuation.

For prudent investors, the revised outlook connected Baidu banal warrants a person look. Recognize, however, that the premix displacement to AI volition instrumentality clip to play out.

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The Analyst's Case

Susquehanna sees continued beardown maturation from Baidu's AI-powered businesses, with notable spot successful AI Cloud Infra. The Q1 study supports that view: AI Cloud Infra gross grew 79% twelvemonth implicit twelvemonth (YoY), and GPU Cloud gross jumped 184% YoY.

Yet, the steadfast flags an offset for Baidu. Online Marketing Services fell 22% YoY, and the Legacy Business conception declined 29% YoY. That structural drag, paired with antagonistic escaped currency travel of $471 cardinal from dense AI capex, keeps the standing astatine Neutral.

Company Snapshot

Baidu operates China's starring hunt motor and is rapidly pivoting toward AI infrastructure, autonomous driving, and ample connection models. Baidu's halfway AI-powered Business gross grew 49% YoY to RMB 13.6 billion, exceeding fractional of Baidu General Business gross for the archetypal time.

Baidu CEO Robin Li stated, "AI Cloud Infra delivered exceptional momentum, powered by surging endeavor request and the differentiated full-stack AI capabilities we person built implicit the years." Apollo Go logged 3.2 cardinal afloat driverless rides, up 120% YoY, with enlargement underway successful Dubai, Switzerland, and London.