Baidu (BIDU) Stock Forecast & Price Target

Baidu's strong market position in the search engine sector, commanding over 50% of the market share in China, underpins its significant financial stability, as evidenced by generating 70% of core revenue from online marketing services in 2024. The notable growth of non-advertising revenue, now constituting roughly 40% of Baidu Core, reflects a successful pivot towards AI Cloud services, which grew by 34% year-over-year in the first half of 2025, highlighting the company's adaptability and innovation in technology. Furthermore, the focus on subscription-based revenue models is poised to enhance revenue stability and contribute to the overall positive outlook for Baidu's financial performance.

Baidu's financial outlook appears negative due to a 2% year-over-year decline in core revenues, driven primarily by a significant 15% drop in advertising revenue. This decline is attributed to the company's transition towards generative AI search, which has negatively impacted traditional ad load while the monetization of GenAI remains in nascent stages. Furthermore, projections indicate ongoing advertising revenue pressures, with anticipated declines of 25% year-over-year in the third quarter and 15% in the fourth quarter as the company navigates this challenging transition.