Investment Rating - The report maintains a "Buy" rating for Baidu with a target price of $183.00 per ADS, indicating a potential upside of 96.5% from the current price of $93.15 [3][6]. Core Insights - Baidu's core business revenue growth for Q2 2024 is expected to meet the report's expectations but fall slightly short of broader market expectations due to proactive business adjustments and a soft macroeconomic environment affecting overall advertising budgets. However, these adjustments are anticipated to enhance user experience and long-term monetization prospects [2]. - The profitability of Baidu's cloud segment is expanding, driven by increased penetration of fully autonomous vehicles and the deployment of new car models, which may improve the unit economics of its Robotaxi business [2]. - The report estimates Baidu's core revenue for Q2 2024 at RMB 26.3 billion, flat year-over-year but 2.7% below Bloomberg's expectations, primarily due to advertising performance [2]. Financial Summary - For FY24E, Baidu's revenue is projected to be RMB 138.474 billion, reflecting a 2.9% year-over-year growth. Adjusted net profit is expected to be RMB 27.667 billion, a decrease of 3.8% compared to FY23A [5][10]. - The report forecasts Baidu's cloud revenue to grow by 14% year-over-year in Q2 2024, up from 12% in Q1 2024 and 5% in Q2 2023, driven by AI-related cloud revenue growth [2][10]. - The report highlights that the penetration rate of fully autonomous vehicles in Baidu's Robotaxi service has increased significantly, with over 70% of rides in Wuhan being provided by fully autonomous vehicles as of April 2024 [2]. Valuation - The SOTP (Sum of the Parts) valuation for Baidu is maintained at $183.00 per ADS, based on a non-GAAP PE of 17.1x for FY24E, translating to 11.1x if net cash is excluded. The core business is valued at $69.2 per ADS, while the cloud segment is valued at $32.2 per ADS [6][7].

Investment Rating - The report maintains a "BUY" rating for Baidu, with a target price of US$183.00 per ADS, indicating a potential upside of 96.5% from the current price of US$93.15 [2][3]. Core Insights - Baidu's core business is expected to deliver revenue growth in line with expectations, albeit slightly slower than market consensus for 2Q24, primarily due to proactive business adjustments to integrate more GenAI-related results in search, which are currently under-monetized [2]. - The cloud segment is on a profitability expansion track, and the increasing penetration of fully driverless cars is anticipated to improve unit economics for the Robotaxi business [2]. - The proactive adjustments in the core business are expected to enhance user experience and long-term monetization prospects, despite a soft macroeconomic environment affecting overall advertising budgets [2]. Financial Forecast - For 2Q24, Baidu Core is estimated to have booked revenue of RMB26.3 billion, flat year-over-year but 2.7% lower than Bloomberg consensus, mainly due to advertising performance [2]. - The forecast for Baidu Core's advertising revenue is RMB19.0 billion, down 3.0% year-over-year, influenced by the integration of GenAI-related search results, softer economic growth, and intense industry competition [2]. - Non-GAAP operating profit for Baidu Core is expected to be RMB6.5 billion in 2Q24, translating to a non-GAAP operating profit margin of 24.7% [2]. Segment Performance - Baidu Cloud revenue is projected to grow by 14% year-over-year in 2Q24, up from 12% in 1Q24 and 5% in 2Q23, driven by the ramp-up of AI-related cloud revenue [2]. - The rides provided by fully driverless vehicles accounted for over 70% of the total for Robotaxi in April 2024, a significant increase from previous quarters, with expectations to reach 100% in the near future [2]. - The new-generation car RT6 is priced at RMB204.6k, significantly lower than the RT5, which is expected to reduce hardware depreciation costs post-deployment [2]. Valuation - The SOTP-based target price of US$183.0 per ADS translates into 17.1x 2024E PE on a non-GAAP basis, or 11.1x if excluding net cash [7]. - The valuation breakdown includes US$69.2 for Baidu Core, US$1.8 for Apollo ASD, US$32.2 for Baidu Cloud, US$64.6 of net cash, and US$15.2 for iQIYI and other investments [7].

Core Insights - Baidu's Robotaxi initiative is poised to disrupt urban transportation, with significant user adoption expected due to policy support and fleet expansion [1][2] - The global Robotaxi market is projected to reach $25 billion, with a potential RMB 35 billion (US$5 billion) market in China alone from a modest 5% penetration [2] Group 1: Factors Influencing Robotaxi Profitability - Average Price Per Trip: Baidu currently offers an 80% discount compared to regular taxis, which is expected to phase out as the service gains traction [1] - Utilization Rate: The current utilization rate is over 60%, indicating potential for efficiency improvements [1] - Safety Personnel: The current setup involves one person monitoring two cars, with plans for fully driverless operations in cities like Wuhan, which could enhance economic viability [1] Group 2: Financial Projections and Market Outlook - Positive unit economics for Baidu's Robotaxi initiative could be achieved by 2025, with daily operating profits per car projected between RMB 25 to 300 [2] - Baidu has received support from major cities like Shanghai and Beijing for its Robotaxi policy rollout, crucial for the upcoming RT6 launch before the end of 2024 [2] - Goldman Sachs maintains a Buy rating for Baidu, with a revised 12-month price target of $144, indicating a potential upside of 54.6% from the current share price of $93.15 [3]

Company Performance - Baidu Inc. (BIDU) closed at $99.07, reflecting a -1.59% change from the previous day, underperforming the S&P 500's gain of 0.55% [1] - Over the past month, Baidu's shares increased by 7.11%, outperforming the Computer and Technology sector's gain of 5.73% and the S&P 500's gain of 4.28% [1] - The upcoming earnings report is anticipated to show an EPS of $2.87, a decrease of 7.72% year-over-year, with expected quarterly revenue of $4.86 billion, up 3.42% from the previous year [1] Analyst Estimates - For the full year, Zacks Consensus Estimates project earnings of $11.43 per share and revenue of $19.63 billion, reflecting changes of +0.35% and +3.98% respectively compared to the previous year [2] - Recent revisions in analyst estimates indicate confidence in Baidu's business performance and profit potential, with these changes being linked to near-term stock movements [2] Valuation and Ranking - Baidu Inc. currently has a Forward P/E ratio of 8.81, which is significantly lower than the industry average Forward P/E of 23.06 [3] - The company holds a Zacks Rank of 4 (Sell), with no changes in the Zacks Consensus EPS estimate over the past month [3] - The Internet - Services industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 103, placing it in the top 41% of over 250 industries [3]

Group 1: Baidu Inc (BIDU) - Baidu Inc's stock increased by 2.1%, trading at $99.99, driven by rising demand for robotaxis [1] - BIDU reached its highest level since late May, bouncing back from a 52-week low of $86.87 on July 7 [1] - The stock is on track for its third consecutive daily gain and is aiming for its first close above the 80-day moving average in over a month, although it remains down 15.7% for 2024 [1] Group 2: Alibaba Group Holding Ltd (BABA) - Alibaba's shares rose by 3% to $78.31, bouncing off the $70 level, which had previously contained a pullback from a May rally [1] - The stock is also looking for its third consecutive win and a close above the 80-day trendline, despite a year-over-year deficit of 16% [1] - BABA managed to swing above its year-to-date breakeven today [1] Group 3: JD.com Inc (JD) - JD.com's stock is facing pressure at its 80-day trendline, with the $36 level capping its May rally [2] - A familiar support level at $25 has prevented further losses, but the stock has dropped 24.5% over the past 12 months [2] - JD.com carries a slim 2.1% deficit so far this year [2]

Group 1: Michael Burry's Investment Performance - Michael Burry has continued to invest successfully in the stock market, with several holdings outperforming benchmark indices like the S&P 500 in 2024 [1] - RealReal (NASDAQ: REAL) has shown a significant year-to-date increase of 68.53% [1] Group 2: Baidu (NASDAQ: BIDU) - Baidu is positioned for strong performance in 2024, working to reduce reliance on foreign semiconductors and entering a deal with Tesla for self-driving car maps [2] - Analysts rate Baidu as a 'strong buy,' with an average price target of $142.84, indicating a potential upside of 45.84% [2][3] - The highest price target for Baidu is $181.69, while the lowest is $81.91, suggesting a forecast downside of 16.37% [2][3] Group 3: JD.com (NASDAQ: JD) - JD.com is the largest holding in Burry's portfolio, with expectations for significant returns despite past performance not being lucrative [4] - The stock is rated as a 'buy' by 6 experts and 'strong buy' by 32, with a 12-month price target of $40.45, reflecting a potential increase of 51.15% [4][5] - The highest price target for JD.com is $69.50, indicating a potential upside of 159.73%, while the lowest is $15.74, suggesting a downside of 41.17% [5] Group 4: Vital Energy (NYSE: VTLE) - Vital Energy is currently down 4.42% year-to-date but is expected to rise significantly in the coming months [6] - The stock has a diverse rating distribution, with 6 'strong buys,' 2 'buys,' 4 'holds,' and 1 each of 'sell' and 'strong sell' [6][8] - The average price target for Vital Energy is $65.43, indicating a potential increase of 51.42%, with the most bullish prediction reaching $105 per share [6][7]

A pair of Wall Street analysts expect two top-notch artificial intelligence (AI) stocks to climb by 102% and 116% over the next 12 months.When the internet started to become mainstream three decades ago, the growth arc for businesses in America and around the globe completely changed. After decades of patiently waiting, Wall Street and investors have identified what they believe is the next breakthrough innovation that's going to alter the growth trajectory for corporate America: artificial intelligence (AI ...

6月30日北京经信局发布关于对《北京市自动驾驶汽车条例(征求意见稿)》公开征集意见的公告,推动市场 对自动驾驶相关标的的投资情绪提升。我们对百度的萝卜快跑(Apollo Go)业务的单位经济模型(UE)进行 情景分析,同时对百度萝卜快跑业务在武汉地区的运营情况进行情景分析,认为全无人自动驾驶业务的持续渗 透或有望推动业务UE显著提升,未来单车硬件成本进一步下探、单均打车距离提升及补贴优化、云代驾驾驶人 员覆盖车辆范围提升及成本优化均有望助推UE进一步提升。在2024年4月武汉萝卜快跑业务超过70%的订单 已由全无人车辆完成的情况下,管理层既定的2024年年末盈亏平衡的目标有望达成。我们认为,尽管自动驾驶 的商业化落地受一城一策影响,推进步调有所差异,但城市维度的监管指引陆续明晰有助推动自动驾驶行业发 展进一步提速,而具备技术和有效数据积累的公司有望持续受益。我们维持对于百度基于分部估值法183.0美 元的目标价和"买入"评级。 监管法规陆续落地或助推自动驾驶行业发展进一步提速。 6月30日北京市经信局发布关于对《北京市自动驾驶 汽车条例(征求意见稿)》公开征集意见的公告,提及拟支持自动驾驶汽车用于城市公共电汽 ...

2024 年 7 月 11 日 招银国际环球市场 | 睿智投资 | 公司更新 百度 (BIDU US) 全无人自动驾驶持续推进或有望显著推动 UE 提升 6 月 30 日北京经信局发布关于对《北京市自动驾驶汽车条例(征求意见稿)》 公开征集意见的公告,推动市场对自动驾驶相关标的的投资情绪提升。我们对 百度的萝卜快跑(Apollo Go)业务的单位经济模型(UE)进行情景分析,同时 对百度萝卜快跑业务在武汉地区的运营情况进行情景分析,认为全无人自动驾 驶业务的持续渗透或有望推动业务 UE 显著提升,未来单车硬件成本进一步下 探、单均打车距离提升及补贴优化、云代驾驾驶人员覆盖车辆范围提升及成本 优化均有望助推 UE 进一步提升。在 2024 年 4 月武汉萝卜快跑业务超过 70%的 订单已由全无人车辆完成的情况下,管理层既定的 2024 年年末盈亏平衡的目标 有望达成。我们认为,尽管自动驾驶的商业化落地受一城一策影响,推进步调 有所差异,但城市维度的监管指引陆续明晰有助推动自动驾驶行业发展进一步 提速,而具备技术和有效数据积累的公司有望持续受益。我们维持对于百度基 于分部估值法 183.0 美元的目标价和"买入" ...

About this content About Angela Harmantas Angela Harmantas is an Editor at Proactive. She has over 15 years of experience covering the equity markets in North America, with a particular focus on junior resource stocks. Angela has reported from numerous countries around the world, including Canada, the US, Australia, Brazil, Ghana, and South Africa for leading trade publications. Previously, she worked in investor relations and led the foreign direct investment program in Canada for the Swedish government ...