Susquehanna Raises Baidu PT to $95, Maintains Neutral Rating

Susquehanna Raises Baidu PT to $95, Maintains Neutral Rating

Susquehanna International Group has raised its price target for Baidu (NASDAQ:BIDU) to $95.00 from $85.00, while maintaining a Neutral rating on the Chinese tech company’s stock. The investment firm noted that Baidu's second-quarter results showed mixed performance, with weakness in its online marketing business but solid momentum in its AI cloud segment. Despite facing monetization headwinds from the transition to AI-powered search, Baidu's management expressed optimism about the long-term potential for AI search monetization [1].

Baidu's second-quarter earnings revealed a 4% year-over-year decline in total revenues to RMB 22.7 billion. However, the company experienced a notable 27% increase in its AI cloud services, indicating growth in this area. Core advertising revenue faced challenges, dropping 15% year-over-year to RMB 16.2 billion, with the AI-generated content expanding significantly in search result pages. Despite these challenges, Baidu's core non-GAAP EBIT margin decreased to 17% from 26% a year earlier, reflecting the impact of AI integration [1].

Benchmark adjusted its price target for Baidu to $115 from $120, while Tiger Securities set a price target of $100, both maintaining a Buy rating [1]. Susquehanna's Neutral rating suggests that while Baidu's valuation is undemanding, shares are likely to remain rangebound for the foreseeable future.

References:
[1] https://www.investing.com/news/analyst-ratings/susquehanna-raises-baidu-stock-price-target-to-95-on-ai-cloud-momentum-93CH-4219358