In a report released yesterday, Saiyi He from CMB International Securities maintained a Buy rating on Baidu, with a price target of $148.40.
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Saiyi He has given his Buy rating due to a combination of factors that highlight Baidu’s potential for growth and value enhancement. The analyst anticipates that Baidu’s core business revenue will see a decline due to ongoing transformations in its advertising sector. However, this is expected to be counterbalanced by a strong growth in cloud services, projected at 20% year-over-year, driven by increased demand related to AI technologies.
Moreover, Saiyi He points out that while the recovery in core advertising may take time, new growth drivers such as agent-related ads and digital human formats are emerging. These innovations are expected to gradually contribute more significantly to revenue. Additionally, Baidu’s substantial cash reserves and potential optimization in cash usage are seen as factors that could further support the company’s valuation. The analyst has thus raised the target price, reflecting a more optimistic outlook for Baidu’s cloud business and overall growth prospects.
In another report released on October 14, Citi also maintained a Buy rating on the stock with a $166.00 price target.