Baidu's Ad Revenue Challenges Prompt Price Target Cut to $81 by Barclays

Barclays has reduced its price target for Baidu (BIDU) from $84 to $81 and maintained an Equal Weight rating due to growing challenges in Baidu's advertising division. The firm adjusted its estimates for Baidu accordingly. The average one-year price target for Baidu is $103.16, implying an upside of 17.88% from the current price. Baidu reported a 7% year-over-year increase in Baidu Core's total revenue, driven by strong performance in the AI Cloud business.

Barclays has reduced its price target for Baidu (BIDU) from $84 to $81, maintaining an Equal Weight rating, due to growing challenges in Baidu's advertising division [1]. The firm has adjusted its estimates for Baidu accordingly. The average one-year price target for Baidu is $103.16, implying an upside of 17.88% from the current price of $87.51 [1].

Baidu reported a 7% year-over-year increase in Baidu Core's total revenue, reaching RMB25.5 billion, driven by strong performance in the AI Cloud business [1]. AI Cloud revenue surged by 42% year over year to RMB6.7 billion, accounting for 26% of Baidu Core revenue [1]. However, Baidu Core's online marketing revenue decreased by 6% year over year to RMB16.0 billion, indicating challenges in this segment [1]. Additionally, total revenues from IT decreased by 9% year over year, reflecting potential difficulties in this area [1].

Jefferies has also cut its price target for Baidu to $110 from $120, still an upside of ~18% to the stock's last close [2]. The brokerage expects Q2 Baidu Core revenue to decline by about 3% year over year to about RMB26 billion yuan ($3.62 billion) [2]. It expects Q2 Baidu Core online marketing revenue to decline by about 16% year over year versus the previously expected 10% decline [2]. The brokerage suggests that revenue falls due to weaker ad demand and sluggish AI products monetization [2].

Despite these challenges, Baidu's AI Cloud business continues to grow, with AI Cloud revenue accounting for 26% of Baidu Core revenue [1]. The company's Apollo Go autonomous ride-hailing service has achieved 100% fully driverless operations in Mainland China and expanded internationally to Dubai and Abu Dhabi [1].

References:
[1] https://www.gurufocus.com/news/2987010/baidu-bidu-faces-price-target-cut-amid-ad-revenue-challenges-bidu-stock-news
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L4N3TD18P:0-baidu-s-us-listed-shares-fall-after-jefferies-cuts-pt/