Bernstein downgrades Baidu on ‘significant change’ to AI monetization

Bernstein downgraded Baidu to Market Perform from Outperform with a price target of $97, down from $130. On the earnings call, Baidu talked about going straight to a cost-per-sale advertising method for artificial intelligence monetization, which is a “significant change,” the analyst tells investors in a research note. The firm says this means “not pursuing other less complex methods and singularly pursuing a strategy that is more complex, without proven examples, with a much higher risk of a long air pocket.” Bernstein downgrades Baidu, preferring to wait for more clarity on its monetization plans to get back into the stock. It expects more disruption to the company’s near term Search results and limited signs of success in next few quarters.