Baidu (BIDU) Stock Forecast & Price Target

Baidu's stock outlook appears positive due to its strong market position as the leading internet search engine in China, capturing over 50% of the market share in 2024. The firm has successfully pivoted towards non-advertising revenue, which now constitutes approximately 40% of its core business, showcasing a notable year-over-year growth of 34% in AI Cloud services during the first half of 2025. This strategy, combined with a shift towards subscription-based revenue models, reflects Baidu's focus on enhancing revenue stability and capitalizing on growing demand for AI-driven solutions across various sectors.

Baidu's core revenues experienced a 2% year-over-year decline, primarily driven by a significant 15% drop in advertising revenue attributed to the company's shift toward generative AI, which has adversely affected traditional ad load. Additionally, the negative outcomes from iQIYI, which reported an 11% year-over-year revenue decline, underscore the challenges faced in Baidu's broader ecosystem. This transition to generative AI has led to an anticipated continued decline in ad revenue, with revised forecasts predicting a 25% year-over-year decrease in the third quarter and a 15% decrease in the fourth quarter, emphasizing the exploratory nature of the monetization process.