Baidu (BIDU) Stock Forecast & Price Target

Baidu's positive outlook is supported by its dominant position in the Chinese search engine market, claiming over 50% market share in 2024, and generating 70% of its core revenue from online marketing services. The company has demonstrated significant growth in its AI initiatives, with AI Cloud revenue increasing 34% year-over-year in the first half of 2025, and non-advertising revenues rising 26% year-over-year, now comprising approximately 40% of Baidu Core. Furthermore, the strong growth in AI-native Marketing Services, which surged 262% year-over-year to RMB 2.8 billion, highlights Baidu's successful diversification towards innovative and technology-driven revenue streams.

Baidu's financial outlook appears negative primarily due to a stagnating core advertising revenue, which is projected to decline by 15% year-over-year amid the company's transition to generative AI, highlighting concerns over the monetization of this technology. Additionally, Baidu Core revenues showed a 2% year-over-year decrease, exacerbated by a significant 21% drop in advertising revenue, pointing to challenges in maintaining traditional revenue streams during this transitional period. Furthermore, while Baidu achieved an EBITDA of RMB 4.4 billion, the decline in margins by 11.6 percentage points indicates deteriorating profitability, further adding to financial pessimism regarding the company's revenue generation capabilities moving forward.