Baidu, Inc. Class A (9888) AI Stock Analysis

• Market Cap: HK$249.49B
• Dividend Yield: N/A
• Average Volume (3M): 9.41M
• Price to Earnings (P/E): 9.1
• Beta (1Y): 1.32
• Revenue Growth: -1.73%
• EPS Growth: 32.35%
• Country: HK
• Employees: 35,900
• Sector: Communication Services
• Sector Strength: 71
• Industry: Internet Content & Information
• EPS (TTM): 2.52
• Shares Outstanding: 2,280,439,500
• 10 Day Avg. Volume: 14,916,138
• 30 Day Avg. Volume: 9,410,181
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$90.00
• Price Target Upside: 1.18% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 79 Outperform
• Price Target: HK$99.00 ▲(11.30%Upside)

Baidu, Inc. scores well due to its strong financial performance and undervaluation, supported by robust growth in its AI Cloud segment and strategic advancements. However, concerns about cash flow constraints and declining traditional revenue streams temper the overall outlook.

Positive Factors

AI Investment Impact

Baidu's commitment to higher investment in AI is projected to significantly boost its cloud revenue growth, expected to rise from 20% to 26% year-over-year.

Cloud Revenue Growth

Baidu's AI Ernie model enhancements have led to a remarkable 42% growth in cloud revenue, showcasing the strength of its enterprise cloud offerings.

Negative Factors

Ad Revenue Pressure

Near-term ad revenue remains under pressure due to macroeconomic uncertainty and AI search upgrades, affecting Baidu's core online marketing business.

AI Monetisation Uncertainty

The company lacks a clear AI monetisation plan, leading to a cautious market outlook and a HOLD recommendation.

Earnings Decline

Baidu's 3Q24 core earnings dropped by 19% year-over-year, falling 5% below market expectations, largely due to an increased decline in online marketing revenue.

Baidu, Inc. Class A Business Overview & Revenue Model

Company Description

Baidu, Inc. offers internet search services in China. It operates through Baidu Core and iQIYI segments. The company offers Baidu App to access search, feed, and other services using mobile devices; Baidu Search to access its search and other services; Baidu Feed that provides users with personalized timeline based on their demographics and interests; Baidu Health that helps users to find the doctor and hospital for healthcare needs; and Haokan, a short video app. It also provides Baidu Knows, an online community where users can ask questions to other users; Baidu Wiki; Baidu Experience; Baidu Post; Baidu Wenku; Baidu Maps, a voice-enabled mobile app that provides travel-related services; Baidu Drive; Baijiahao; and DuerOS, a smart assistant platform. In addition, it offers online marketing services, which include pay for performance, an auction-based services that allow customers to bid for priority placement of paid sponsored links and reach users who search for information related to their products or services; other marketing services that include display-based marketing services and other online marketing services based on performance criteria other than cost per click; mobile ecosystem, a portfolio of apps, including Baidu App, Haokan, and Baidu Post; various cloud services and solutions, such as platform as a service, software as a service, and infrastructure as a service; self-driving services, including maps, automated valet parking, navigation pilot, electric vehicles, and robotaxi fleets, as well as Xiaodu smart devices. Further, the company provides iQIYI, an online entertainment service, including original and licensed content; other video content and membership; and online advertising services. Baidu, Inc. has strategic partnership with Zhejiang Geely Holding Group. The company was formerly known as Baidu.com, Inc. Baidu, Inc. was incorporated in 2000 and is headquartered in Beijing, China.

How the Company Makes Money

Baidu primarily generates revenue through its online marketing services, where businesses pay for advertising on Baidu's platforms, leveraging its search engine's massive user base for visibility and customer acquisition. The company's advertising services include pay-for-performance services and other marketing offerings. Additionally, Baidu has been expanding its revenue streams by investing in artificial intelligence and cloud computing, offering AI solutions and cloud-based services to enterprises. Partnerships and collaborations in the autonomous driving and smart device sectors also contribute to Baidu's revenue, as it commercializes its AI technologies and products.

Baidu, Inc. Class A Financial Statement Overview

Summary

Baidu, Inc. presents a strong financial position with solid margins and profitability in the income statement and a stable balance sheet with low leverage. While the cash flow situation shows potential constraints, the company's overall financial health is robust. Continued focus on cash flow improvements could further enhance financial resilience.

Income Statement

Baidu, Inc. shows a strong income statement performance with a consistent revenue base and improving profitability. The gross profit margin for the TTM is 49.06%, reflecting efficient cost management. The net profit margin has increased to 19.41% from 17.84% in the previous annual report, indicating improved net income relative to revenue. Revenue growth was modest but steady. The EBIT margin improved significantly compared to historical losses, now at 15.13%, and the EBITDA margin is 25.45%, highlighting strong operational efficiencies.

Balance Sheet

The balance sheet demonstrates stability with a healthy equity ratio of 59.41%, indicating robust equity financing relative to assets. The debt-to-equity ratio is 0.38, suggesting a conservative leverage approach. ROE is 9.65%, reflecting decent returns for equity holders. Overall, the balance sheet is strong with substantial equity and manageable debt levels.

Cash Flow

Cash flow analysis shows some concerns despite overall positive cash generation. The free cash flow growth rate has slowed, highlighting potential challenges in cash generation relative to past performance. The operating cash flow to net income ratio of 0.35 indicates that a smaller portion of net income is turned into cash, which may suggest cash flow constraints. The free cash flow to net income ratio is only 0.06, highlighting low free cash flow relative to net income, possibly due to high capital expenditures.

Breakdown
Income Statement
Total Revenue
Gross Profit
EBITDA
Net Income
Balance Sheet
Total Assets
Cash, Cash Equivalents and Short-Term Investments
Total Debt
Total Liabilities
Stockholders Equity
Cash Flow
Free Cash Flow
Operating Cash Flow
Investing Cash Flow
Financing Cash Flow

Baidu, Inc. Class A Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 88.95
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:9888, the sentiment is Positive. The current price of 88.95 is above the 20-day moving average (MA) of 87.10, above the 50-day MA of 85.31, and above the 200-day MA of 86.56, indicating a bullish trend. The MACD of 1.17 indicates Negative momentum. The RSI at 54.78 is Neutral, neither overbought nor oversold. The STOCH value of 54.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:9888.

Baidu, Inc. Class A Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9888	79 Outperform	HK$249.49B	9.05	9.84%	―	-1.73%	32.35%
Sector *	62 Neutral	$41.98B	-1.92	-12.06%	3.47%	2.10%	-71.01%
TCTZF	―	$642.77B	23.19	21.25%	0.01%	―	―
CHLLF	―	$4.05B	27.70	-1.14%	―	―	―
1698	79 Outperform	HK$236.09B	25.13	14.34%	0.84%	4.16%	82.42%
1024	78 Outperform	HK$314.15B	19.04	25.82%	―	9.42%	33.34%
9898	74 Outperform	HK$19.59B	7.61	10.79%	8.02%	0.43%	21.65%

Baidu, Inc. Class A Corporate Events

Baidu, Inc. Schedules Board Meeting and Earnings Call for Q2 2025 Results

Baidu, Inc. has announced that its board of directors will meet on August 20, 2025, to approve the unaudited financial results for the second quarter and interim period ending June 30, 2025. The announcement will be made available on the Hong Kong Stock Exchange and the company’s website after trading hours in Hong Kong, and before the U.S. market opens. Additionally, Baidu will hold an earnings conference call on the same day to discuss the financial results, providing stakeholders with insights into the company’s performance and strategic direction.

The most recent analyst rating on (HK:9888) stock is a Buy with a HK$134.00 price target. To see the full list of analyst forecasts on Baidu, Inc. Class A stock, see the HK:9888 Stock Forecast page.

Baidu Reports Strong Q1 2025 Results with AI Cloud Surge and Robotaxi Expansion

Baidu, Inc. announced its unaudited financial results for the first quarter of 2025, highlighting a 7% year-over-year growth in Baidu Core revenue, driven by a 42% increase in AI Cloud services. The company also achieved a significant milestone by expanding its Apollo Go robotaxi service to Dubai and Abu Dhabi, reinforcing its commitment to global markets. The results underscore Baidu’s strategic focus on AI, positioning it for long-term growth opportunities in the AI era.

The most recent analyst rating on (HK:9888) stock is a Hold with a HK$85.00 price target. To see the full list of analyst forecasts on Baidu, Inc. Class A stock, see the HK:9888 Stock Forecast page.

Baidu, Inc. Announces Annual General Meeting for June 2025

Baidu, Inc. has announced the scheduling of its annual general meeting of shareholders, which will be held on June 27, 2025, at its campus in Beijing. The meeting will not include any proposals for shareholder approval, and the company has set May 27, 2025, as the record date for determining shareholder eligibility to attend. This announcement is part of Baidu’s ongoing corporate governance practices, ensuring transparency and engagement with its shareholders.