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Baidu (BIDU)
NASDAQ:BIDU

Baidu (BIDU) AI Stock Analysis

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Baidu

(NASDAQ:BIDU)

Rating:76Outperform
Price Target:
$97.00
▲(12.79%Upside)
Baidu's strong financial performance and strategic focus on AI and cloud services are key strengths, supported by an attractive valuation. The earnings call highlighted significant growth in key areas, although cash flow challenges and declining online marketing revenue pose risks. Technical analysis suggests a cautious outlook, but the overall score reflects a positive long-term growth potential.
Positive Factors
AI Cloud Growth
AI cloud business experienced strong growth, increasing about 42% year over year.
Financial Performance
The company delivered a strong beat on both revenue and earnings in 1Q25, with AI Cloud standing out - growing 42% y/y and posting margins ahead of key competitors.
Share Buyback
Baidu increased its share buyback program, which suggests a potential 6% annual yield at the current market cap.
Negative Factors
Advertising Revenue Decline
The decline in advertising revenue is expected to accelerate as the company increases the use of AI search results.
Monetization Challenges
Current monetization of Baidu's AI search is limited and still undergoing trial and error, with timing and efficiency of monetization still unclear.
Operating Margin Pressure
Investment in AI and negative impact on search ad revs disruption will weigh on Baidu core OpM in coming quarters.

Baidu (BIDU) vs. SPDR S&P 500 ETF (SPY)

Baidu Business Overview & Revenue Model

Company DescriptionBaidu, Inc. (BIDU) is a leading Chinese multinational technology company primarily known for its internet-related services and products, and artificial intelligence capabilities. Founded in 2000, Baidu operates through various segments, including search services, AI cloud, and intelligent driving. Its core products include Baidu Search, the dominant search engine in China, and Baidu AI Cloud, which provides cloud computing and AI services. The company also develops autonomous driving technologies and smart transportation solutions.
How the Company Makes MoneyBaidu generates revenue through several key streams. The primary source is online marketing services, where the company earns money by providing advertising and marketing solutions through its search platform and other online properties. Advertisers pay Baidu to display their ads in search results and on its network of websites. Additionally, Baidu makes money from its AI Cloud services by offering cloud computing, big data, and AI products to enterprises. Another significant revenue stream is its Intelligent Driving and Autonomous Vehicles segment, which focuses on developing and commercializing self-driving technologies and services. Partnerships with government bodies and other tech companies also contribute to Baidu's earnings, enhancing its capabilities in areas like smart cities and autonomous driving.

Baidu Key Performance Indicators (KPIs)

Any
Any
Revenue by Segment
Revenue by Segment
Shows how revenue is distributed across different business units, highlighting which segments drive growth and profitability, and indicating areas of strategic focus or potential vulnerability.
Chart InsightsBaidu's 'Other' segment shows steady growth, with a notable uptick in 2025, reflecting strategic expansion efforts. However, the 'Online Marketing Services' segment faces headwinds, with a decline in recent quarters, aligning with a 6% year-over-year drop in online marketing revenue. This shift underscores Baidu's pivot towards AI and cloud services, as highlighted by a 42% rise in AI Cloud revenue. While AI investments are driving innovation and expansion, they also contribute to negative free cash flow, posing a risk to financial stability.
Data provided by:Main Street Data

Baidu Earnings Call Summary

Earnings Call Date:May 21, 2025
(Q1-2025)
|
% Change Since: -3.74%|
Next Earnings Date:Aug 20, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed sentiment with significant achievements in AI Cloud growth, AI search enhancements, and international expansion of autonomous driving. However, these highlights are balanced by declines in online marketing and iQIYI revenue, as well as negative free cash flow due to high AI investments.
Q1-2025 Updates
Positive Updates
AI Cloud Revenue Growth
AI Cloud revenue reached RMB6.7 billion in Q1, a year-over-year increase of 42%, driven by the adoption of Gen AI and foundation models.
AI Cloud's Growing Share of Baidu Core Revenue
AI Cloud accounted for 26% of Baidu Core revenue, up from 20% a year ago, reflecting its growing significance.
Improved User Experience in AI Search
In April, 35% of mobile search result pages contained AI-generated content, up from 22% in January, indicating an enhanced user experience.
Expansion of Autonomous Ride-Hailing Service
Apollo Go entered Dubai and Abu Dhabi, marking its international expansion, with over 1,000 fully driverless vehicles deployed globally.
Non-GAAP Operating Margin for AI Cloud
AI Cloud's non-GAAP operating margin is now at the level of teens, indicating improved profitability.
Negative Updates
Decline in Online Marketing Revenue
Baidu Core's online marketing revenue decreased 6% year-over-year, impacting overall revenue growth.
Revenue Decrease from iQIYI
Revenue from iQIYI was RMB7.2 billion, decreasing 9% year-over-year, affecting overall financial performance.
Negative Free Cash Flow
Free cash flow was negative RMB8.9 billion, mainly due to increased investments in AI business.
Company Guidance
During the first quarter of 2025, Baidu reported a 7% year-over-year increase in Baidu Core’s total revenue, reaching RMB25.5 billion, driven primarily by their AI Cloud business which saw a 42% rise in revenue to RMB6.7 billion. The AI Cloud now accounts for 26% of Baidu Core's revenue, up from 20% a year ago. Baidu's AI advancements included the release of ERNIE 4.5 and ERNIE X1 models, which were further enhanced with the ERNIE 4.5 Turbo and ERNIE X1 Turbo versions, offering improved performance and reduced pricing. The company also emphasized its focus on making AI more open and collaborative by planning to open source the ERNIE 4.5 series and adopting open standards. Additionally, Baidu's Apollo Go autonomous ride-hailing service expanded internationally, reaching the Middle East and increasing its global presence to 15 cities, with plans for further expansion. The company noted a significant year-over-year growth in ride volume by 75%, with over 1,000 fully driverless vehicles deployed globally. Moreover, Baidu's search transformation efforts led to an increase in AI-generated content on mobile search result pages from 22% in January to 35% in April, enhancing user experience and retention. Baidu continues to invest heavily in AI, autonomous driving, and search transformation, while also returning value to shareholders through accelerated share repurchase programs.

Baidu Financial Statement Overview

Summary
Baidu demonstrates strong financial recovery and solid profitability, supported by robust revenue growth and improved margins. However, cash flow generation has decreased, indicating a reliance on operating performance for cash generation.
Income Statement
80
Positive
Baidu's income statement shows robust performance with a strong TTM gross profit margin of 49.05% and a net profit margin of 19.41%. The company has demonstrated a healthy revenue growth trajectory, with a notable recovery from previous losses, as seen in the EBIT margin turning positive. This indicates improved operational efficiency. However, the gross profit margin slightly decreased compared to the previous year, which might suggest rising costs or competitive pricing pressure.
Balance Sheet
75
Positive
The balance sheet reflects a solid financial position, with a debt-to-equity ratio of 0.38, indicating moderate leverage. The equity ratio stands at 59.42%, showcasing stability and a strong equity base. Although there is a slight increase in total debt, the company's equity growth keeps the leverage at manageable levels. Return on equity improved significantly to 9.65%, aligning with the company's profitability recovery.
Cash Flow
70
Positive
Baidu's cash flow statement reveals some challenges, with a lower free cash flow generation compared to previous periods, primarily due to reduced operating cash flow. The operating cash flow to net income ratio of 0.35 suggests efficient conversion of profits into cash but indicates a decrease from prior periods. The free cash flow to net income ratio of 0.06 highlights a reliance on operating performance for cash generation.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
134.06B133.13B134.60B123.67B124.49B107.07B
Gross Profit
65.77B67.02B69.57B59.74B60.18B51.92B
EBIT
20.29B21.27B21.86B-5.58B-8.46B-8.37B
EBITDA
30.77B35.95B36.53B14.51B14.10B14.34B
Net Income Common Stockholders
26.03B23.76B20.32B7.56B7.59B22.47B
Balance SheetCash, Cash Equivalents and Short-Term Investments
141.77B127.44B193.90B174.00B180.09B162.18B
Total Assets
453.98B427.78B406.76B390.97B380.03B332.71B
Total Debt
102.05B79.32B84.59B91.35B91.51B82.59B
Net Debt
52.85B54.49B59.36B38.20B54.66B46.81B
Total Liabilities
163.91B144.17B144.15B153.17B156.08B140.87B
Stockholders Equity
269.75B263.62B243.63B223.48B211.46B182.70B
Cash FlowFree Cash Flow
1.66B13.10B25.32B17.78B8.88B18.87B
Operating Cash Flow
9.01B21.23B36.62B26.17B20.12B24.20B
Investing Cash Flow
-6.64B-8.55B-50.40B-3.94B-31.44B-27.55B
Financing Cash Flow
4.35B-13.76B-14.16B-6.39B23.40B5.67B

Baidu Technical Analysis

Technical Analysis Sentiment
Negative
Last Price86.00
Price Trends
50DMA
86.18
Negative
100DMA
89.01
Negative
200DMA
89.10
Negative
Market Momentum
MACD
-0.16
Negative
RSI
48.25
Neutral
STOCH
69.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BIDU, the sentiment is Negative. The current price of 86 is above the 20-day moving average (MA) of 85.78, below the 50-day MA of 86.18, and below the 200-day MA of 89.10, indicating a neutral trend. The MACD of -0.16 indicates Negative momentum. The RSI at 48.25 is Neutral, neither overbought nor oversold. The STOCH value of 69.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BIDU.

Baidu Risk Analysis

Baidu disclosed 108 risk factors in its most recent earnings report. Baidu reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Baidu Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
87
Outperform
$2.13T19.6134.79%0.48%13.02%37.73%
84
Outperform
$2.13T19.4834.79%0.48%13.02%37.73%
82
Outperform
$1.72T26.6439.83%0.31%19.37%47.56%
76
Outperform
$30.46B8.539.85%-1.33%32.92%
TMTME
76
Outperform
$27.58B21.5114.37%0.98%4.59%83.27%
76
Outperform
$142.73B114.8624.28%16.07%
61
Neutral
$14.56B5.82-4.02%6.41%2.72%-31.67%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
BIDU
Baidu
86.00
-5.41
-5.92%
META
Meta Platforms
682.87
177.58
35.14%
GOOGL
Alphabet Class A
174.67
-1.71
-0.97%
SPOT
Spotify
710.85
399.63
128.41%
TME
Tencent Music Entertainment Group
18.42
4.43
31.67%
GOOG
Alphabet Class C
175.88
-2.04
-1.15%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.