Daiwa maintained a Buy rating on BIDU-SW due to strong performance in AI cloud infrastructure, which saw a 79% year-over-year revenue growth. Despite some softness in AI applications, AI-driven revenue constituted over 52% of Baidu's core revenue. The overall cloud revenue grew 53% year-over-year, driven by increased demand and enterprise adoption across various sectors. Daiwa adjusted its EPS forecasts, raising the 2026 estimate by 5% and lowering the 2027 estimate by 12%, while also reducing the target price from HKD 175 to HKD 170.
