Baidu Inc. (NASDAQ: BIDU) is making strides in cloud computing and generative AI, countering challenges from China’s inconsistent economic recovery. Mizuho has raised its price target to $105 from $95, highlighting strong AI-driven growth.

Highlights from Mizuho’s Analysis

• Cloud revenue grew by 26% YoY in Q4, showcasing an expanding AI market.
• Generative AI now contributes significantly to total revenue.
• The ERNIE 4.5 model trend toward open-source may enhance adoption, paralleling successful strategies like DeepSeek.
• Daily API calls for the ERNIE LLM have surged to 1.65 billion in December (up from 50 million a year prior).
• Core 2026 EBITDA forecast increased by 5% to 31 billion yuan attributed to AI monetization and economic backing.

AI and Search Monetization for Improved Outlook

Even amid a 7% drop in advertising revenue, Mizuho anticipates gradual recovery in 2025 driven by:
✔️ AI-powered search monetization
✔️ Policy stimulus impacts
✔️ Cloud growth contributing $30 per share

Future Prospects for Baidu

Despite a 7.5% decrease in U.S.-listed shares on Tuesday, analysts view AI as a “free call option” at present values. Seasonal declines from the Lunar New Year are to be expected but a year-over-year revenue increase seems likely.

Relevant Financial APIs for In-depth Insights

• Company Rating API – Access real-time ratings for Baidu.
• Technical Intraday API – Follow Baidu’s short-term price fluctuations.

Conclusion

Baidu’s strategic focus on AI and cloud services positions it for growth, overcoming geopolitical pressures. Continued AI adoption is a significant growth catalyst, influencing revenue and valuation future developments.