Baidu (BIDU) Stock Forecast & Price Target

Baidu's strong market position as the largest search engine in China, holding over 50% of the search engine market share in 2024, underpins its significant core revenue from online marketing services. The company's non-advertising revenue accounts for approximately 40% of Baidu Core, with a robust 34% year-over-year growth in AI Cloud services in the first half of 2025, indicating a successful transition towards diverse revenue streams. This strategic pivot towards subscription-based offerings and technology-driven initiatives such as autonomous driving and voice recognition further positions Baidu for sustainable growth in the rapidly evolving tech landscape.

Baidu has experienced a decline in core revenues by 2% year-over-year, primarily driven by a significant 15% drop in advertising revenue, largely attributed to the company's shift towards generative AI search solutions, which has impaired traditional ad load. This transition is compounded by the fact that monetization of generative AI search remains in its early stages, leading to uncertain revenue streams. Forecasts indicate a concerning continuation of this trend, with anticipated advertising revenue declines of 25% year-over-year in the third quarter and 15% in the fourth quarter, reflecting ongoing challenges in adapting to new market dynamics.