AI Headwinds Force Price Target Cut on Baidu Stock Outlook
Baidu, Inc. is among the AI stocks that investors have to monitor. Tiger Securities kept its buy recommendation on the stock on July 30 and lowered its price target from $110.00 to $100.00. Following the company’s negative revision of Baidu’s revenue and profit expectations due to AI-driven drags from search monetization, the price target dropped.
AI Search Surge Pressures Baidu’s Ad Revenue Outlook
Baidu says there have been difficulties making money from AI-generated search results. An estimated 50% of all queries currently consist of them.
We are maintaining our BUY rating but lowering PT to $100 (from $110) as we revise down our revenue and profit estimates to reflect the ongoing drag from AI-driven changes in search monetization. AI-generated search results now account for approximately 50% of total queries, up from 35% in April, while the monetization model remains in the testing phase. Additionally, the consolidation of YY is expected to weigh on BIDU’s advertising revenue, as YY was previously one of BIDU’s top advertising clients. As a result, we are lowering our 2025 ad revenue forecasts.
Tiger Securities
Baidu’s Next-Gen Tech Push: Cloud, Autonomous Cars, and AI Content Expansion
Baidu continues to invest in next-generation technology with the goal of long-term growth, despite the short-term difficulties. The business is actively improving its AI monetization tactics and investigating a variety of income sources outside of typical search ads, such as cloud computing, driverless cars, and AI-powered content platforms. Although the present monetization model is still developing, analysts believe that Baidu is well-positioned to benefit from the growing AI ecosystem once more sustainable revenue streams are put in place, due to its robust technology foundation and large user base.
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