Baidu.com: Key takeaways from investor meeting

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Baidu.com: Key takeaways from investor meeting

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Baidu.com

Key takeaways from investor meeting

Maintain Rating: BUY | PO: 180.00 USD | Price: 131.18 USD

Strong demand for cloud and chip, structural margin uplift 22 May 2026

Baidu reported a beat 1Q26 result and we hosted Baidu CFO for a call with investors. Equity

Baidu’s cloud business had strong growth in 1Q (result note), and mgmt. is confident to

Miranda Zhuang, CFA >>

continue outgrow peers and expand margin. Drivers are: 1) Surging AI demand across Research Analyst

industries and use cases, 2) improving utilization of cloud resources as demand shifts to Merrill Lynch (Hong Kong) miranda.zhuang@bofa.com

inference, 3) favorable supply vs. demand dynamic change, enhancing the bargaining

Joanna Du >>

power of cloud providers, 4) structurally higher gross margin of GPU cloud, driving AI Research Analyst

Cloud infra’s gross margin to 25%-30% in the medium term, 5) Baidu’s market share Merrilljoanna.du@bofa.comLynch (Hong Kong)

gain because of strengths in full stack AI infra & capabilities, client selection, token cost

Alex Liu >>

optimization, talent. A good fit for inference demand, Baidu’s Kunlunxin chip has Research Analyst

increasing demand from customers. Co. is optimistic about Kunlunxin’s fulfilment Merrillalex.liu3@bofa.comLynch (Hong Kong)

capability and product pipeline. Therefore we believe that Baidu’s cloud and chip Joyce Ju >>

businesses’ revenue and profit can grow sustainability over the long term. Research Analyst

Merrill Lynch (Hong Kong)

Improve operation efficiency, optimize capital allocation joyce.ju@bofa.com

Mgmt. is optimistic about Baidu’s overall topline and profit. AI-powered businesses will

continue to contribute over half of the revenue mix.