Youdao's stock price surged 5.29% during intraday trading on Friday, following a positive analyst report that highlighted the company's improving financial metrics and advancements in artificial intelligence.
Huatai Securities maintained its "Buy" rating on Youdao and raised its target price from $13.56 to $13.99, citing a higher valuation for the company's advertising business. The report noted that Youdao delivered its best Q1 operating cash flow performance since 2022, with advertising revenue accounting for 43% of total revenue. Furthermore, quarterly sales from AI subscription services exceeded CNY 1 billion for the first time, growing over 70% year-over-year.
The company recently upgraded its "Ziyue" large language model to version 4.0, marking its full entry into the multimodal era. Youdao's CEO stated the company remains committed to its "AI-native" strategy, focusing on continuous iteration of its vertical large models for education and advertising applications.
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