Street Calls of the Week
Investing.com - Tiger Securities raised its price target on Baidu (NASDAQ:BIDU) to $135 from $100 on Thursday, while maintaining a Buy rating on the Chinese tech company. The stock, currently trading at $120.66, has shown strong momentum with a 42% gain year-to-date, according to InvestingPro data.
The firm cited Baidu’s potential to benefit from accelerating AI adoption in China and its leadership position in global robotaxi operations as key factors behind the increased target, despite trimming near-term revenue and profit forecasts. InvestingPro analysis indicates the company maintains a "GOOD" overall financial health score, with particularly strong marks in profitability metrics.
Tiger Securities expects Baidu’s Search + Feed revenue to decline 20% and 17% year-over-year in the third and fourth quarters, respectively, as monetization from AI-enhanced search results is taking longer than anticipated to materialize.
The firm projects Baidu’s cloud business will grow 20% year-over-year in the third quarter, driven by strong AI-related demand in China, and notes the company is exploring multiple initiatives to unlock shareholder value, including enhanced AI disclosures and potential divestment of non-core assets.
Despite lowering its estimates for Baidu Core revenue and non-GAAP EBIT, Tiger Securities views the current risk/reward as compelling, noting the stock trades at just 6.9x 2026E EV/EBITDA, which it believes already discounts weakness in the advertising business. InvestingPro analysis suggests Baidu is currently undervalued, trading at an attractive EV/EBITDA multiple of 4.1x and P/E ratio of 12.8x. For deeper insights into Baidu’s valuation and growth prospects, including exclusive ProTips and comprehensive analysis, check out the full Pro Research Report available on InvestingPro.
In other recent news, Baidu has seen a series of analyst updates reflecting its strategic focus on artificial intelligence and its impact on the company’s valuation. Several firms have raised their price targets for Baidu, highlighting the company’s AI growth potential and developments. Bernstein increased its price target from $90 to $150, noting Baidu’s plans to unlock value within the group. CLSA raised its target to $160, identifying key growth areas such as Apollo Go and AI cloud. Goldman Sachs set a new target of $154, acknowledging the market’s understanding of a decline in Baidu’s search business and the anticipated impact on core operating profit. Jefferies adjusted its target to $157, citing Baidu’s recent AI developments and partnerships with large customers. Susquehanna, while raising its target to $95, pointed out Baidu’s mixed second-quarter results, with weaknesses in online marketing but strengths in AI cloud momentum. These updates underscore the market’s focus on Baidu’s AI initiatives as a significant factor in its future valuation.
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