Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>Baidu, Inc. delivered a solid performance in the first quarter of 2025, with its Baidu Core division reporting a 7% year-over-year revenue increase, reaching RMB 25.5 billion.</li><li>This growth was primarily driven by a substantial surge in its AI cloud business, which saw a 42% increase year-over-year, contributing significantly to Baidu Core’s overall revenue.</li><li>A notable development within this business unit is the expansion of the AI cloud’s role in Baidu’s operations, now accounting for 26% of Baidu Core's revenue, up from 20% in the previous year.</li></ul>

Baidu, Inc. delivered a solid performance in the first quarter of 2025, with its Baidu Core division reporting a 7% year-over-year revenue increase, reaching RMB 25.5 billion.This growth was primarily driven by a substantial surge in its AI cloud business, which saw a 42% increase year-over-year, contributing significantly to Baidu Core’s overall revenue.A notable development within this business unit is the expansion of the AI cloud’s role in Baidu’s operations, now accounting for 26% of Baidu Core's revenue, up from 20% in the previous year.

Baidu Inc.: Dealing With The Uncertain Commercial Viability of Autonomous Driving

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>BIDU reported C1Q25 top line, non-GAAP operating profit and GAAP net income 4.5%, 8.6% and 58% vs. our estimates. Baidu Core revenue beat our estimate by 3.4%, </li>
<li>We believe BIC's outperformance stemmed from enterprise demand for AI adoption. Further, BIDU's integrated AI offering should allow it to capture AI's 2C revenue quicker. </li>
<li>We cut the TP from US$88 to US$85 and maintain SELL.</li>
</ul>


BIDU reported C1Q25 top line, non-GAAP operating profit and GAAP net income 4.5%, 8.6% and 58% vs. our estimates. Baidu Core revenue beat our estimate by 3.4%, 
We believe BIC's outperformance stemmed from enterprise demand for AI adoption. Further, BIDU's integrated AI offering should allow it to capture AI's 2C revenue quicker. 
We cut the TP from US$88 to US$85 and maintain SELL.


[Baidu (BIDU US, SELL, TP US$85) TP Change]: C1Q25: Accelerated AI Search Transition Releases Risk

<ul>
<li>We expect Baidu to report C1Q25 top line,non-GAAP operating profit and GAAP net income inline, (4.2%) and (8.2%) vs. the consensus, and C2Q25 top line guidance (2.7%) vs. the consensus</li>
<li>Although we expect rebounding consumption to help BIDU's advertising business, its traffic share losses were alarming. Further, we expect some of BIDU's core advertising categories to experience sluggish recovery;</li>
<li>We maintain our view that Baidu lacks visible growth drivers, reiterate our SELL rating, and cut its TP to US$88.</li>
</ul>


We expect Baidu to report C1Q25 top line,non-GAAP operating profit and GAAP net income inline, (4.2%) and (8.2%) vs. the consensus, and C2Q25 top line guidance (2.7%) vs. the consensus
Although we expect rebounding consumption to help BIDU's advertising business, its traffic share losses were alarming. Further, we expect some of BIDU's core advertising categories to experience sluggish recovery;
We maintain our view that Baidu lacks visible growth drivers, reiterate our SELL rating, and cut its TP to US$88.


[Baidu (BIDU US, SELL, TP US$88) Preview]: Search Traffic’s Decline in Relevance the No.1 Issue

<ul><li>Baidu is intensifying its AI initiatives with the launch of ERNIE 4.5 Turbo and ERNIE X1 Turbo, aiming to solidify its position in China's competitive AI landscape.</li><li>These models boast enhanced multimodal capabilities and are priced significantly lower than competitors, with ERNIE 4.5 Turbo costing just 1% of GPT-4.5's price.</li><li>In a strategic shift, Baidu plans to open-source ERNIE 4.5 by June 30, 2025, and has made its ERNIE Bot free for individual users.</li></ul>

Baidu is intensifying its AI initiatives with the launch of ERNIE 4.5 Turbo and ERNIE X1 Turbo, aiming to solidify its position in China's competitive AI landscape.These models boast enhanced multimodal capabilities and are priced significantly lower than competitors, with ERNIE 4.5 Turbo costing just 1% of GPT-4.5's price.In a strategic shift, Baidu plans to open-source ERNIE 4.5 by June 30, 2025, and has made its ERNIE Bot free for individual users.

Baidu’s AI Shake-Up: Can ERNIE 4.5 Turbo Outmaneuver DeepSeek & Alibaba?

<ul>
<li>We conducted a drill exercise in which BIDU's search revenue will shrink to 1/3 of its size while its AI cloud</li>
<li>Our key concern is margin compression as search's high margin as a result of browser infrastructure and monopolistic status aren't repeatable in AI;</li>
<li>We raise the TP from US$80.0 to US$92.5 and maintain SELL.</li>
</ul>


We conducted a drill exercise in which BIDU's search revenue will shrink to 1/3 of its size while its AI cloud
Our key concern is margin compression as search's high margin as a result of browser infrastructure and monopolistic status aren't repeatable in AI;
We raise the TP from US$80.0 to US$92.5 and maintain SELL.


[Baidu, Inc. (BIDU US, SELL, TP US$92.5) TP Change]: What Can Change BIDU from SELL to a BUY?

China

Baidu, Inc. operates an Internet search engine. The Company offers algorithmic search, enterprise search, news, MP3, and image searches, voice assistance, online storage, and navigation services. Baidu serves clients globally.

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Baidu (BIDU US)

Baidu Inc.: Dealing With The Uncertain Commercial Viability of Autonomous Driving

Baidu, Inc. delivered a solid performance in the first quarter of 2025, with its Baidu Core division reporting a 7% year-over-year revenue...

Baptista Research

[Baidu (BIDU US, SELL, TP US$85) TP Change]: C1Q25: Accelerated AI Search Transition Releases Risk

BIDU exceeded expectations in Q1 with strong revenue and profit growth driven by enterprise AI demand, but analyst downgrades stock to SELL with a...

Blue Lotus Research Institute

[Baidu (BIDU US, SELL, TP US$88) Preview]: Search Traffic’s Decline in Relevance the No.1 Issue

Baidu's Q1 results in line with expectations, but concerns remain about advertising business and lack of growth drivers. Analysts maintain SELL...

Blue Lotus Research Institute

Baidu’s AI Shake-Up: Can ERNIE 4.5 Turbo Outmaneuver DeepSeek & Alibaba?

Baidu is intensifying its AI initiatives with the launch of ERNIE 4.5 Turbo and ERNIE X1 Turbo, aiming to solidify its position in China's...

Baptista Research

[Baidu, Inc. (BIDU US, SELL, TP US$92.5) TP Change]: What Can Change BIDU from SELL to a BUY?

Concerns about margin compression for BIDU due to shrinking search revenue and the unreliability of high margins in AI lead to a maintained SELL...

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Baidu Inc.: Dealing With The Uncertain Commercial Viability of Autonomous Driving

Baidu, Inc. delivered a solid performance in the first quarter of 2025, with its Baidu Core division reporting a 7% year-over-year revenue...

Baptista Research

[Baidu (BIDU US, SELL, TP US$85) TP Change]: C1Q25: Accelerated AI Search Transition Releases Risk

​BIDU exceeded expectations in Q1 with strong revenue and profit growth driven by enterprise AI demand, but analyst downgrades stock to SELL with a...

Blue Lotus Research Institute

[Baidu (BIDU US, SELL, TP US$88) Preview]: Search Traffic’s Decline in Relevance the No.1 Issue

​Baidu's Q1 results in line with expectations, but concerns remain about advertising business and lack of growth drivers. Analysts maintain SELL...

Blue Lotus Research Institute

Baidu’s AI Shake-Up: Can ERNIE 4.5 Turbo Outmaneuver DeepSeek & Alibaba?

Baidu is intensifying its AI initiatives with the launch of ERNIE 4.5 Turbo and ERNIE X1 Turbo, aiming to solidify its position in China's...

Baptista Research

[Baidu, Inc. (BIDU US, SELL, TP US$92.5) TP Change]: What Can Change BIDU from SELL to a BUY?

​Concerns about margin compression for BIDU due to shrinking search revenue and the unreliability of high margins in AI lead to a maintained SELL...

Blue Lotus Research Institute

BIDU exceeded expectations in Q1 with strong revenue and profit growth driven by enterprise AI demand, but analyst downgrades stock to SELL with a...

Baidu's Q1 results in line with expectations, but concerns remain about advertising business and lack of growth drivers. Analysts maintain SELL...

Concerns about margin compression for BIDU due to shrinking search revenue and the unreliability of high margins in AI lead to a maintained SELL...