CLSA lowers Baidu’s US stock target price to $150, slashing adjusted earnings forecasts for this year and next by 18% to 24%

Golden Ten Data reported on July 16 that Lyon released a research report, forecasting that the core business revenue of a certain exchange will decrease by 4.2% year-on-year to RMB 25.1 billion in the second quarter of 2026. Affected by continued disruptions in the search business, marketing revenue is expected to decline by about 22% year-on-year. AI cloud infrastructure revenue is expected to increase by 56% year-on-year to RMB 7.6 billion, while subscription revenue further accelerates from the 184% year-on-year growth rate in the first quarter. Dragged down by the decline in high-margin online marketing revenue and increased investment in model training, the bank currently estimates that the core adjusted EBIT for the second quarter will decrease by 14% year-on-year to RMB 3.8 billion, with an adjusted EBIT profit margin of about 15%. Lyon believes the AI transformation path of the exchange is not smooth, with insufficient model competitiveness possibly leading to further slowdown in the search business, and the cloud business lacking MaaS and application revenue. Lyon has lowered its adjusted net profit forecasts for 2026 and 2027 by 24% and 18%, respectively, and revised the US stock target price of the exchange from $176 to $150, maintaining an Outperform rating.