In "The Big Banks," Citigroup raises Baidu's target price to $176, expecting continued strong growth in Robotaxi and Kunlun chip business

Citi published a research report indicating that Baidu (09888.HK) may continue to be affected by the transformation to AI search in the fourth quarter of last year, but believes that the year-on-year decline in total revenue and adjusted EBITDA could narrow, currently forecasting a 16% year-on-year decline in online marketing revenue. The bank continued to state that considering AI search now accounts for over 70% of total search results, and the contribution of AI-native marketing solutions to revenue has exceeded 20%, the decline in online marketing revenue is nearing the bottom.

Citi predicts that Baidu's cloud business revenue growth may slow to around 10% year-on-year under a high base, as the application of AI in China becomes increasingly widespread, estimating that the business could return to growth this year, with an expected increase of 20%. The bank anticipates that Baidu's Robotaxi and Kunlun chip businesses can continue to maintain strong growth, and also noted that the group's earlier large-scale personnel optimization will support profit recovery this year, raising Baidu's (BIDU.US) target price from $160 to $176, maintaining an "Outperform" rating