Baidu.com (BIDU.O): 2Q26E Preview: Decelerating AI Cloud Revs With Declining Ad Revs

研报英文原文证据摘录

Baidu.com (BIDU.O): 2Q26E Preview: Decelerating AI Cloud Revs With Declining Ad Revs

Baidu.com (BIDU.O)

14 July 2026 Citi Research

Risks

Downside risks that could impede the Baidu shares from reaching our target

price include: 1) the search business recovers more slowly than expected and

the ad budget loses share to competitors; 2) news feed ads face tougher

competition from the incumbents; 3) a further slowdown in China’s economy

(including from the coronavirus outbreak) affects overall advertising

sentiment; and 4) regulatory actions lead to further adjustments in search

results inventory.

iQIYI

(IQ.O; US$1.13; 1; 13 Jul 26; 16:00)

Company description

iQiyi positions itself as an innovative market-leading online entertainment

service in China. It is a leading internet video streaming service company in

China in terms of user time spent and average total MAU in 2017, per

iResearch. Through license partnering, it also operates the largest smart TV

video streaming service in China, as measured by monthly active devices in

December 2017. Parent company Baidu owns a 45.2% equity stake and has

89.2% voting power in iQiyi due to the dual-class share structure.

Investment strategy

We rate iQiyi shares as Buy. With good content quality and resilient time

spent, membership revs will retain relatively steady growth, in our view. With

disciplined cost control, we expect non-GAAP Op to sustain a profitable

trend.

Valuation

We use P/S multiple to value iQiyi with target price of US$1.8. We use P/S

multiple because there are big swings in recent quarterly earnings depending

on content performance and the subscription business model has leverage

impact on profit, while iQiyi’s revenue scale remains largely predictable.

We assign a 0.5x P/S multiple on 2026E revenue.