The Zhitong Finance App learned that Goldman Sachs released a research report stating that it maintains the Baidu Group-SW (09888) “buy” rating, with a target price of HK$167.

The bank said it held a meeting with Baidu's head of investor relations to discuss recent revenue trends in online marketing and cloud computing, and analyze the contribution of incremental generative artificial intelligence revenue and traditional revenue. New generative AI tools have received more and more customer recognition in the past two quarters, and thanks to the increasing contribution of generative AI, cloud business revenue will accelerate for the rest of the year.

The report quoted management as saying that competition risks are limited due to recent price cuts in the industry for IaaS (infrastructure-based services). The Group continues to strictly control costs to offset the impact of investment in AI, and profit margins are likely to remain stable year over year; in terms of capital use, stock repurchases will continue this year, capital expenditure may be lower than last year, and the acquisition of YY Live will be terminated.