Kingsoft Cloud: Bollinger Bands Narrowing and KDJ Death Cross on 15-Minute Chart

Kingsoft Cloud's 15-minute chart has triggered a narrowing of the Bollinger Bands, and a KDJ Death Cross at 07/08/2025 15:00. This indicates a decrease in the magnitude of stock price fluctuations, and a shift in momentum towards the downside, potentially leading to further decreases.

Baidu, the Chinese tech giant, has appointed Haijian He as its Chief Financial Officer (CFO), effective July 1, 2025. This appointment signals a strategic pivot to address the company's core challenges in scaling AI infrastructure efficiently and justifying its high valuation [1]. He's tenure at Kingsoft Cloud offers a blueprint for Baidu's AI strategy, with a proven track record of driving AI revenue growth while stabilizing margins [1].

At Kingsoft, He delivered a 228% year-over-year surge in AI-related gross billing to RMB525 million in Q1 2025, while keeping adjusted EBITDA margins stable at 16.2% [1]. He achieved this by optimizing costs through partnerships with third-party data centers and leveraging ecosystem-driven revenue. Baidu's AI Cloud revenue grew 42% YoY in Q1 2025 to RMB9.4 billion, but gross margins dipped to 16.6%, reflecting rising infrastructure costs [1]. He's task at Baidu is to replicate Kingsoft's margin discipline in this higher-stakes environment.

Baidu's Q1 2025 results underscore both promise and peril. AI-related revenue now accounts for 40% of non-GAAP revenue, up from 38% in 2024, with autonomous driving (Apollo) contributing over 1.4 million rides [1]. However, non-GAAP gross margins remain under pressure, down from 19.2% in Q4 2024. The culprit? Investments in high-margin AI infrastructure have spiked operating expenses [1].

Key challenges for He include infrastructure scaling, leveraging ecosystem synergies, and justifying Baidu's sky-high valuation. Baidu trades at a 113x P/E ratio, a premium justified only if AI margins stabilize. Non-GAAP net profit rose 42% YoY in Q1 to RMB7.7 billion, but investors will demand consistency [1].

The risks include regulatory headwinds, hyperscaler competition, and questions about He's preparedness. However, if Q3 2025 results show margin stability, AI revenue traction, and capital discipline, Baidu's valuation becomes defensible. Investors should treat Q3 results as a litmus test for He's ability to execute under pressure.

References:
[1] https://www.ainvest.com/news/baidu-ai-pivot-cfo-track-record-drive-margin-triumph-2507/