On Tuesday, Jefferies maintained a Buy rating on Baidu (NASDAQ:BIDU) stock and increased its price target slightly to $128 from the previous $126. This adjustment comes as the firm anticipates Baidu Core to perform according to revenue expectations for the fourth quarter. Jefferies has taken into account the one-off costs related to the restructuring of Jiyue, as reported by various media outlets.
The firm's analysts expect Baidu to continue concentrating on enhancing the quality of its AI search capabilities, offering users a variety of formats instead of just a percentage of search results driven by AI. This focus on AI is seen as a key factor in the company's strategy moving forward.
According to Jefferies, there is an expectation that the year-over-year decline in advertising revenue will narrow in the first quarter of 2025. This projection is based on the belief that Baidu's strategic adjustments will begin to yield positive results.
Furthermore, the firm anticipates that Baidu's cloud revenue will experience an acceleration in year-over-year growth throughout 2025. This growth is expected to be fueled by increasing demand for AI services. Jefferies' analysis suggests that Baidu's emphasis on AI and cloud services will be central to the company's revenue growth in the near future.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.