Goldman Sachs published a research report indicating that Baidu (09888.HK)'s revenue for the first quarter of this year met expectations, EBIT and net profit exceeded expectations, mainly due to the increase in the contribution of generative artificial intelligence under business restructuring and the recovery of deferred revenue from traditional advertising businesses. The bank indicates that due to strong demand for GPUs in the cloud and the strengthening of smartphone OEMs in generative AI, Baidu management expects the cloud computing business to grow at an accelerated pace and that operating profit margins will remain stable. The bank believes that Baidu's current risk-return level is improving. Although prospects for the recovery of the core advertising business lack visibility, on the other hand, the accelerated growth of cloud computing business and the increase in AI-related revenue contributions can lead the group to a slow but guaranteed revenue recovery path, Baidu's target price reduction from HK$157 to HK$150 based on the latest valuation expectations.