First Read: Baidu, Inc. "1Q26 earnings review: Improving fundamentals led..."

Research evidence excerpt

First Read: Baidu, Inc. "1Q26 earnings review: Improving fundamentals led..."

Global Research

19 May 2026ab

First Read

EquitiesBaidu, Inc.

1Q26 earnings review: Improving fundamentals China

led by AI Cloud Infra business Internet Services

12-month rating Buy

12m price target US$180.00

Strong demand and full-stack AI capabilities to drive growth and margin upside

Prior : US$170.00

Baidu reported strong 1Q26 results, with AI Cloud Infra growth and Core OP ahead of

expectations (note). We are encouraged by its robust cloud momentum, with AI Cloud Price (18 May 2026) US$137.71

Infra/GPU cloud revenue growing 79%/184% YoY in 1Q26, driven by continued RIC: BIDU.O BBG: BIDU US

strength in AI training demand as well as a pick-up in inference workload, together with

Trading data and key metrics

an expanding and more diversified client base (e.g., autonomous driving, embodied AI).

Aided by the favourable demand backdrop and leveraging its full-stack AI capability, we 52-wk range US$162.52-81.90

expect Baidu's AI Cloud Infra revenue to sustain above-industry growth in 2026E (UBSe Market cap. US$47.4b

of 70% YoY), out of which the subscription-based GPU cloud business could see even Shares o/s 344m (ORD)

stronger growth at triple-digits. Meanwhile, we believe the GPU cloud business enjoys a Free float 72%

higher margin than the overall cloud business, thanks to better pricing power from Avg. daily volume ('000) 2,186

technical complexity and tight high-quality compute supply, and its rising contribution Avg. daily value (m) US$276.2

over time should structurally benefit Baidu's cloud business and Baidu Core overall. The Common s/h equity (12/26E) Rmb285b

company's ongoing efforts on cost optimisation, higher server utilisation and internal AI P/BV (12/26E) 1.1x