In a report released today, Gary Yu from Morgan Stanley maintained a Hold rating on Baidu (BIDU – Research Report), with a price target of $100.00.
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Gary Yu has given his Hold rating due to a combination of factors that reflect Baidu’s recent financial performance and market conditions. Baidu’s total revenue increased by 3% year-over-year, surpassing expectations due to strong performance in its cloud segment. However, the core marketing revenue saw a slight decline, which was offset by significant growth in non-marketing areas, particularly driven by AI cloud services.
Despite these positive aspects, Baidu’s core non-GAAP operating profit decreased by 13% year-over-year, although it still managed to exceed market expectations. Additionally, iQIYI’s revenue dropped by 9%, yet it performed slightly better than anticipated. These mixed results, along with the modest upside potential to the price target, contribute to the Hold rating as the stock’s future performance remains uncertain.