Morningstar: After the recovery of the Chinese economy, Baidu's advertising business is expected to rebound, with a predicted fair value of $146

AASTOCKS
2025.11.20 03:33

Morningstar published a research report stating that Baidu (09888.HK) experienced a 7% year-on-year decline in revenue for the third quarter, which is in line with expectations. Core advertising revenue fell by 18%, reflecting the ongoing impact of a weak macroeconomic environment. However, it is believed that as the Chinese economy recovers, Baidu's advertising business is also expected to rebound. Additionally, the development of AI cloud services is seen as providing long-term upward potential for Baidu's business transformation. Currently, it is predicted that Baidu's AI cloud revenue will grow by over 20% year-on-year in the fourth quarter.

Morningstar believes that Baidu's shares are currently undervalued, maintaining a reasonable value forecast of HKD 143 for Baidu's Hong Kong stock and USD 146 for Baidu (BIDU.US) in the U.S. stock market

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