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Investing.com - Benchmark raised its price target on Baidu (NASDAQ:BIDU) to $158.00 from $115.00 on Wednesday, while maintaining a Buy rating on the Chinese tech company’s stock. This new target aligns closely with InvestingPro’s Fair Value assessment, which suggests Baidu is currently undervalued at its present price of $117.14, despite its impressive 38.94% gain year-to-date.
The price target increase follows Baidu’s third-quarter results, which revealed diverging performance between the company’s traditional search advertising business and its growing artificial intelligence initiatives.
Benchmark noted that Baidu’s AI business is showing strong momentum with 50% year-over-year growth, now accounting for approximately 40% of core revenue under the company’s new disclosure framework.
The firm highlighted that while core search ad revenue remains challenged with uncertain recovery timing, Baidu’s management is prioritizing user experience and demonstrating commitment to scaling its AI operations across Cloud, AI Applications, and AI-native Marketing Services.
Benchmark adopted a sum-of-the-parts valuation approach to reflect Baidu’s business composition, citing greater transparency, faster AI adoption, and potential asset value recognition as key factors supporting the higher price target. With a P/E ratio of 12.81 and an attractive PEG ratio of just 0.25, Baidu appears well-positioned for growth. The stock maintains a "GOOD" overall financial health score according to InvestingPro, which offers comprehensive analysis on over 1,400 US equities through its detailed Pro Research Reports.
In other recent news, Baidu Inc. announced its third-quarter 2025 financial results, revealing a complex financial landscape. The company experienced a 7% decrease in total revenues, amounting to RMB 31.2 billion compared to the previous year. However, a notable development was the 21% surge in revenue from Baidu’s AI Cloud segment, which reached RMB 6.2 billion. The earnings report highlighted Baidu’s strategic emphasis on AI technologies and the expansion of its robotaxi services. Despite the overall revenue dip, these areas of growth indicate a shift in the company’s operational focus. No recent merger activities were reported. Analyst opinions on Baidu’s stock were not mentioned, leaving the company’s current market standing open to interpretation. These developments come as Baidu continues to navigate the evolving tech landscape.
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