Baidu (BIDU) Stock Forecast & Price Target

Baidu's stock outlook remains positive due to its strong position in the Chinese market, commanding over 50% share of the search engine market as of 2024, which contributes significantly to its core revenue from online marketing services. The company has seen substantial growth in non-advertising revenue, accounting for approximately 40% of Baidu Core, driven by a 34% year-over-year increase in AI Cloud services evident in the first half of 2025. Additionally, the strategic shift toward subscription-based revenue models enhances revenue stability while reflecting robust demand for AI-driven solutions across various sectors.

Baidu's financial outlook is challenged by a 2% year-over-year decline in core revenues, primarily driven by a significant 15% drop in advertising revenue, highlighting the impact of its shift toward generative AI search. The company's aggressive transition is suppressing traditional ad load while monetization strategies for the new AI platform remain in nascent stages, suggesting a lack of short-term profitability. Future projections indicate a potential further decline in ad revenue, with anticipated year-over-year decreases of 25% in the third quarter and 15% in the fourth quarter, reflecting ongoing uncertainties in revenue generation during the transition period.