Baidu’s Growth Potential Driven by Cloud and AI Innovations Amidst Strategic Expansion

Bank of America Securities analyst Miranda Zhuang reiterated a Buy rating on Baidu (BIDU – Research Report) today and set a price target of $100.00.

Miranda Zhuang’s rating is based on Baidu’s strong performance in its cloud business, which has shown significant growth due to increasing demand for AI solutions. The company’s cloud services, primarily based on recurring subscriptions, have accelerated and are expected to continue growing rapidly. Additionally, Baidu’s robotaxi business has achieved full driverless operations in Mainland China and is expanding internationally, which adds to its growth potential.
Furthermore, Baidu’s AI technology leadership and its strategic focus on enhancing user experience over immediate monetization are seen as positive long-term factors. Despite a decline in advertising revenue, the company’s ability to monetize AI search and expand ad formats is promising. Baidu’s financial health is underscored by its substantial net cash position relative to its market capitalization, and its aggressive share buyback program suggests a strong shareholder return. These factors contribute to the Buy rating, supported by an undemanding valuation at a low price-to-earnings ratio.

Zhuang covers the Communication Services sector, focusing on stocks such as Weibo, Baidu, and AutoHome. According to TipRanks, Zhuang has an average return of -11.0% and a 26.00% success rate on recommended stocks.

In another report released yesterday, US Tiger Securities also maintained a Buy rating on the stock with a $110.00 price target.