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![CorleoneDon77 Avatar](https://lunarcrush.com/gi/w:24/cr:twitter::1577382889104318472.png) DonCorleone77 [@CorleoneDon77](/creator/twitter/CorleoneDon77) on x 5476 followers
Created: 2025-07-18 00:58:55 UTC

$BIDU

Attached is page X of a 10-page Bank of America analyst report on BIDU issued today entitled:

"Preview: more ad pressure, cloud on track, Robotaxi going overseas"

Bank of America has a 'Buy' rating on BIDU with a $XXX price target.

Bank of America's summary statement regarding BIDU in the report includes the following:

"Weaker ad, due to acceleration of AI search penetration:

We lower Baidu Core’s 2Q outlook to a X% total revenue decline YoY (vs. -X% previously) and RMB4b (vs. RMB4.9b previously) adjusted OP. We maintain 2Q cloud revenue outlook, as we expect customer demand to remain solid. 

We expect the step-up pace of AI penetration % to go from 13ppt add between Feb-April 2025, to high-teens ppt add between April-Jun 2025, c20s ppt between Jun-Sept 2025. At such pace, we expect AI penetration % to reach 70-80% exiting 3Q25 and then become more stable in 4Q25. 

Accordingly, we expect Baidu’s ad decline to accelerate till 3Q and narrow in 4Q. Due to the cut in the high-margin ad revenue, our profit est. is also lowered. We lower Baidu’s total adj. net profit by XX% for 2025E and largely maintain 26-27E profit outlook. 

Maintain PO of USD100. We maintain Buy rating on undemanding valuation. Baidu is trading at just 9x adj. P/E and its net cash (current+non-current) is c70% of mkt cap.

We expect stock price to react to news & events around robotaxi and AI. To drive stock re-rating, we wait for search’s AI transformation to yield meaningful benefits in traffic and later in monetization. 

According to QuestMobile (Exhibit 1-2), Baidu App’s monthly active user continued to grow in 1H25, and its total user time spent’ s YoY decline has been narrowing in 1H25.

-- Price Objective Basis:

Our PO is US$100 (HK$98): 1) US$88 from a DCF valuation, based on a discount rate of 12%, FCF CAGR of X% in 24-29E, and a terminal growth rate of 5%, 2) US$12 from its investments, primarily comprising and iQIYI. 

-- Downside risks are:

1) major operating or regulation events, 
2) government intervention in business or ownership, 
3) macroeconomic, 
4) competition from other ad platforms and AI service providers, 
5) margin and capex risk on spending for AI, 
6) geopolitical risks may impact access to tech chips and investment by foreign investors, 
7) AI technology usage risk, may impact stock listing or investors ability to own, 
8) more stringent regulation on AI, 
9) more intensified competition on AI, 
10) slower-than-expected ramp of AI ad monetization 

-- Upside risks are:

1) better-than-expected macro recovery, 
2) AI model upgrade that can lead ahead peers in China, 3) upside to cloud business from boost of model adoption by Deepseek, 
4) increase in user adoption of Baidu's model and chatbot after open source, make free, and Deepseek integration, 
5) upside to traffic and revenue from potential iphone partnership."

(Page X is not available here as X does not allow me to post pages from reports on this platform)


XXX engagements

![Engagements Line Chart](https://lunarcrush.com/gi/w:600/p:tweet::1946011768813478149/c:line.svg)

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