Shares of Baidu Group-SW (09888) rose more than 5% during the session. As of the time of writing, the stock is up 4.12%, currently trading at HK$108.60, with a turnover of HK$942 million.
A report from Bank of Communications International states that Baidu's profit inflection point is expected to emerge in the second half of this year, awaiting the reflection of short-term catalysts. The bank has raised its target price for Baidu's U.S.-listed shares to $175 and issued a "Buy" rating. The bank believes that factors such as the sustained high growth of AI cloud infrastructure revenue/optimization of revenue composition, the accelerated commercialization of AI application products (e.g., Dazi/Miaoda/Famou, etc.), and the stabilization of traditional advertising revenue trends will likely drive Baidu's quarterly profit inflection point to appear in the second half of 2026. The bank expects the company's core profit for the 2026 fiscal year to increase by 0.2% year-over-year, accelerating to 13% growth by 2027. Additionally, the bank anticipates that AI cloud infrastructure, applications, and native marketing services will achieve compound annual growth rates of 44%, 5%, and 9%, respectively, between 2026 and 2028. The proportion of new AI business in Baidu's general business revenue is projected to rise from 53% in 2026 to 64% in 2028.
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