Baidu's (BIDU) AI Push Offsets Weak Ads, Analyst Raises Target to $158

Baidu, Inc. (NASDAQ:BIDU) is one of the  AI Stocks Making Moves on Wall Street. On November 19, Benchmark analyst Fawne Jiang raised the firm’s price target on the stock to $158 from $115 and kept a “Buy” rating on the shares. The firm believes that strong AI momentum is helping Baidu offset a weak ad recovery.

The firm noted how Baidu’s Q3 results show diverging trends. Its main search ad business is weak, and it remains unclear when it will recover considering that the company is testing more AI features and also facing competition.

On the other hand, AI initiatives are gaining ground and account for more than 40% of core revenue under the company’s new disclosure framework. These initiatives are helping drive growth across Cloud, AI applications, and AI-native marketing services.

The firm believes that several factors support a higher valuation for Baidu.

“Management is committed to scaling AI, supported by a competitive technology stack and rising structural adoption. With greater transparency, faster AI adoption, and optionality from asset value recognition, we believe a sum-of-the-parts approach is appropriate and raise our price target to $158, reflecting our SoTP valuation.”

Benchmark further stated how search recovery remains concerning, but Baidu’s AI momentum, strong execution, and potential for proactive capital returns will help drive further upside.

“Search recovery remains a near-term concern, as it drives the majority of NT earnings, but we view upside as likely from AI momentum, execution of strategic milestones, and potential for proactive capital returns to better deploy Baidu’s large net cash balance.”

Baidu, Inc. (NASDAQ:BIDU) is a Chinese internet giant and AI pioneer, known for its noteworthy investments in artificial intelligence technology and its position as the dominant search engine within the country.

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