Chinese search engine Baidu (BIDU) is scheduled to announce its results for the first quarter of 2025 on Wednesday, May 21. BIDU stock has risen about 6% year-to-date. Analysts are divided on the internet company’s stock. While Baidu bulls expect the company to gain from its AI (artificial intelligence) initiatives and robotaxi business, other analysts are worried about lackluster growth in the ad business, intense competition, and persistent macroeconomic pressures in China. Analysts expect Baidu’s Q1 FY25 earnings to decline by about 31% to $1.99, with revenue estimated to fall about 2% to $4.29 billion.
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Earlier this year, Baidu reported a lower-than-anticipated decline in its Q4 2024 revenue, as weakness in the advertising business was partially offset by growth in the AI business. According to Main Street Data, the company reported a 7% decline in its Q4 2024 online marketing services revenue. Meanwhile, Baidu’s non-online marketing revenue gained from the strength in the AI Cloud business.
Analysts’ Views Ahead of Baidu’s Q1 Earnings
Last month, Macquarie analyst Ellie Jiang trimmed his price target for Baidu stock to $83 from $85, while maintaining a Hold rating, as he thinks that AI monetization will take time. The 4-star analyst added that the roadmap for AI monetization remains unclear, given the sluggish macro backdrop and significant competition in China’s Search market. Jiang expects Baidu’s core ad business to continue to decline, while he sees the company’s AI Cloud business emerging as a key growth driver due to growing enterprise adoption. He expects AI Cloud revenue to grow 25% year-over-year to RMB 5.9 billion, partially offsetting continued weakness in advertising.
With regard to Robotaxi, Jiang noted that Baidu is aspiring to enter more markets where it can charge higher ASPs (average selling prices) than it does in China, such as Europe and Japan. Meanwhile, on the cost side, Baidu aims to further cut vehicle hardware and safety personnel costs. Nevertheless, Jiang currently sees limited financial impact from Robotaxi and does not factor it into his valuation for BIDU stock.
Meanwhile, Citi analyst Alicia Yap reiterated a Buy rating on Baidu stock with a price target of $139. The 4-star analyst noted the company’s strategic advancements in AI technology and its growth prospects. Yap also highlighted AI product launches and updates, including the Ernie 4.5 Turbo and Ernie X1 Turbo, during the Baidu Create 2025 event, which reflected significant cost efficiency and capability improvements. She believes that Baidu’s innovation positions it favorably within the rapidly evolving AI landscape in China.
Here’s What Options Traders Anticipate
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting about a 6.2% move in either direction in Baidu stock in reaction to Q1 FY25 results.
Is BIDU Stock a Buy, Sell, or Hold?
Wall Street is cautiously optimistic on Baidu stock, with a Moderate Buy consensus rating based on two Buys and three Holds. The average BIDU stock price target of $113.34 indicates about 27% upside potential from current levels.
