In "The Big Banks," CICC raised Baidu's target price to USD 137, with third-quarter performance meeting expectations

Bank of China International published a report stating that Baidu (09888.HK) third-quarter performance met expectations. Total revenue in the third quarter decreased by 7% year-on-year, exceeding market expectations by 1% and aligning with the bank's forecast. Advertising revenue fell by 18% year-on-year, while non-advertising revenue increased by 21%, resulting in a 7% year-on-year decline in Baidu's core revenue. The newly disclosed AI-driven business revenue grew by 50% year-on-year to RMB 9.6 billion, demonstrating the company's achievements in AI commercialization. The adjusted operating profit margin of 7.1% met expectations.

The bank indicated that although Baidu's core traditional advertising revenue will continue to face pressure in the short to medium term, the company is continuously realizing the positive effects brought by its steadfast execution of AI strategies. Coupled with its ample cash reserves and the potential acceleration of shareholder return plans, the rating is maintained at "Buy," with the target price for Baidu (BIDU.US) in the U.S. stock market raised from $133 to $137