Financial Market Analysis & Investment Research Partly open
Baidu (BIDU): A Bet on AI and the Price of Declining Advertising Revenue
Baidu is undergoing the most painful restructuring in its history: its artificial intelligence (AI)-based cloud business is growing at double-digit rates, while search advertising—which has been the company’s main source of revenue for decades—is shrinking by nearly one-fifth annually. Capital expenditures have tripled, free cash flow has turned negative, and the board of directors has approved a dividend policy for the first time. We’ll break down how these shifts are affecting the stock’s valuation in gold and yuan and identify the key levels to watch right now.
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