Baidu rated 'Strong Buy' as AI drives over 50% of revenue and cloud segment grows fast.

Baidu reported better-than-expected Q1 revenues and earnings, driven by AI-related business now making up more than half of its core revenue. The company's cloud infrastructure segment is experiencing exceptional growth, supporting its strong performance. With $40.5 billion in cash and investments, Baidu has a solid financial buffer for strategic moves like investments or buybacks. Trading at 12.7 times forward earnings, Baidu offers investors exposure to China's leading AI and cloud growth with limited downside risk.