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<Research>BofAS Trims BIDU-SW (09888.HK) TP to $98 as AI Search Acceleration Leads to Ads Downside Pressure
BIDU-SW (09888.HK)'s 1Q25 core business revenue was RMB25.5 billion, up 7% YoY, beating market consensus, mainly driven by strong growth in the cloud business, which accelerate...
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<Research>BofAS Trims BIDU-SW (09888.HK) TP to $98 as AI Search Acceleration Leads to Ads Downside Pressure
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BIDU-SW (09888.HK)  +0.450 (+0.544%)    Short selling $262.62M; Ratio 30.780%   's 1Q25 core business revenue was RMB25.5 billion, up 7% YoY, beating market consensus, mainly driven by strong growth in the cloud business, which accelerated to 42% YoY from 26% in 4Q24, according to BofA Securities. Core advertising revenue fell by 6%, in line with expectation.

Management believed that AI search monetization has good potential as it can enhance the monetization capability of long tail queries, expand ad format to multi-media and native content, and improve potential customer conversion rates, although these will take time to gradually achieve.

Related NewsBOCI: BIDU-SW's AI Cloud Biz Rockets on Surging Demand
BofA Securities lowered its 2025/ 2026 adjusted net profit forecasts for BIDU-SW by 6%/ 4% each, thus trimmed its target prices for BIDU-SW/ Baidu (BIDU.US)      based on the discounted cash flow method from $101/ US$104 to $98/ US$100, as the broker projected a larger decline in advertising revenue this year, partially offset by faster growth in the cloud business.

Based on its leadership in AI technology and undemanding valuation, BofA Securities reiterated rating at Buy on BIDU-SW.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-05-23 16:25.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)

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