Goldman Sachs Lowers BIDU TP to $150 Despite 1Q Earnings Beat

Goldman Sachs trimmed BIDU's target price to $150 from $157, maintaining a "Buy" rating. BIDU's 1Q24 revenue met expectations, while EBIT and net profit exceeded them due to contributions from generative AI and a recovery in deferred revenue from traditional advertising.

Management anticipates accelerated growth in the cloud computing business and stable operating margins, driven by high demand for GPU cloud and enhanced AI deployment with smartphone OEMs.

Goldman Sachs sees favorable risk-return levels for BIDU despite uncertain recovery prospects in core advertising. Growth in cloud computing and AI-related revenues suggests a gradual revenue recovery.