Nomura downgrades Baidu on costs of winning AI search

Nomura analyst Jialong Shi downgraded Baidu (BIDU) to Neutral from Buy with a price target of $98, down from $104, following the Q4 report. Baidu still has a good chance to win the race in artificial intelligence search, but the potential costs of winning “could be formidable,” the analyst tells investors in a research note. The firm believes Baidu’s efforts to monetize AI search could be “derailed” by competitors’ insistence on a clean and advertising-free AI search in order to grab users. Baidu’s track record with new initiatives in the past decade “may hardly give the market too much confidence about its capability to hold the ground,” contends Nomura.