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<Research>CLSA Cuts TP for Baidu's US Shrs to US$114; AI Search Transformation Expected to Drag Down 1Q25 Performance
Recommend 4 Positive 8 Negative 2 |
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According to a report from CLSA, the broker predicted that BIDU-SW's (09888.HK) (BIDU.US) total revenue from its core business would grow by 0.8% YoY to RMB24 billion, while its adjusted EBIT would drop by 21% YoY to RMB4.4 billion, after considering that the transformation to AI search and a sluggish macroeconomic environment continued to affect the company in 1Q25. In addition, Baidu's core online marketing revenue might fall 6% YoY as 22% of AI searches did not generate actual revenue. However, cloud business revenue is expected to grow 26% YoY on surging demand for generative AI in both public and private clouds. The decline in advertising revenue also heaped pressure on gross profit. CLSA reduced its target price for Baidu (BIDU.US) from US$120 to US$114, while maintaining an Outperform rating. AAStocks Financial News |
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