Analyst Gary Yu of Morgan Stanley maintained a Hold rating on Baidu, retaining the price target of $100.00.
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Gary Yu’s rating is based on Baidu’s recent financial performance, which showed mixed results. While the company’s total revenue declined by 4% year-over-year, this was largely in line with expectations. The core revenue also saw a slight decrease of 2% year-over-year, with core marketing revenue declining by 15%, which was anticipated. However, the non-marketing segment experienced a significant increase of 34% year-over-year, primarily driven by the AI cloud business.
Despite these positive aspects, Baidu’s core non-GAAP operating profit decreased by 37% year-over-year, although it was slightly better than market expectations. The operating margin also fell by 9.5 percentage points year-over-year. Additionally, the performance of iQIYI, a subsidiary of Baidu, was weaker than expected, with revenue missing estimates and a significant drop in operating profit. These factors combined led Gary Yu to assign a Hold rating, reflecting a cautious outlook amid the mixed financial results.
According to TipRanks, Yu is ranked #7909 out of 9925 analysts.