Shares of Chinese tech major Baidu (NASDAQ:BIDU) are on the rise today after its fourth-quarter numbers came in better than estimates. With a year-over-year increase of 6%, revenue of $4.92 billion surpassed expectations by $40 million. Further, earnings per American Depository Share (EPADS) of $3.08 outpaced consensus by a wide margin of $0.64.
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While its core business remains healthy, Baidu is focusing on driving gains with its AI offerings and operational efficiency. During the quarter, its Core revenue increased by 7% to $3.87 billion. The online marketing portion ticked up by 6% to $2.7 billion. Meanwhile, robust momentum in its AI Cloud business helped Baidu increase its non-online marketing revenue by 9% to $1.17 billion. Further, revenue from iQIYI inched up by 2% to $1.09 billion.
At the same time, higher costs associated with its AI Cloud business resulted in Baidu’s cost of revenues rising by 3% to $2.45 billion. In comparison, the company’s selling, general, and administrative expenses remained largely unchanged at $825 million. The tech major had $28.93 billion in cash at the end of December 2023.
What Is the Target Price for BIDU?
Baidu’s share price has corrected by nearly 19% over the past year amid broader weakness in China’s financial markets. Overall, the Street has a Strong Buy consensus rating on Baidu, and the average BIDU price target of $163.70 implies a substantial 45.7% potential upside in the stock. However, analysts’ views on the stock could see a revision following today’s earnings report.
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