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Investing.com - Susquehanna raised its price target on Baidu (NASDAQ:BIDU) to $95.00 from $85.00 on Tuesday, while maintaining a Neutral rating on the Chinese tech company’s stock. Currently trading at $95.30, Baidu shows a P/E ratio of 8.4x and maintains a "GOOD" overall financial health score according to InvestingPro analysis.
The price target increase follows Baidu’s mixed second-quarter results, which showed weakness in its online marketing business but solid momentum in its AI cloud segment.
Susquehanna noted that Baidu continues to face monetization headwinds from the transition to AI-powered search, which affected its online marketing performance in the quarter.
Despite these near-term challenges, Baidu’s management expressed optimism about the long-term potential for AI search monetization, according to Susquehanna’s report.
The investment firm maintained its Neutral rating on Baidu stock, stating that despite an "undemanding" valuation, shares are "likely to remain rangebound" for the foreseeable future. InvestingPro analysis suggests Baidu is currently undervalued, with additional insights available in the comprehensive Pro Research Report, which provides deep-dive analysis of this and 1,400+ other US stocks.
In other recent news, Baidu reported its earnings for the second quarter of 2025, revealing a 4% year-over-year decline in total revenues to RMB 22.7 billion. Despite this overall revenue dip, the company experienced a notable 27% increase in its AI cloud services, indicating growth in this area. Baidu’s core advertising revenue faced challenges, dropping 15% year-over-year to RMB 16.2 billion, with the AI-generated content expanding significantly in search result pages. Benchmark adjusted its price target for Baidu to $115 from $120 due to these advertising headwinds, though it maintained a Buy rating. Meanwhile, Tiger Securities also retained a Buy rating for Baidu, setting a price target of $100, acknowledging the ongoing revenue challenges linked to the company’s AI search transformation. Baidu’s core non-GAAP EBIT margin decreased to 17% from 26% a year earlier, reflecting the impact of AI integration. These developments highlight the company’s mixed performance amid its strategic shift towards AI technologies.
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