Susquehanna raises Baidu price target to $140 but keeps Neutral rating amid AI growth and ad declines

Susquehanna raised Baidu's price target from $120 to $140 while maintaining a Neutral rating after Q1 2026 results showed strong AI Cloud Infra growth but continued weakness in legacy advertising. AI Cloud Infra revenue surged 79% YoY, yet declines in Baidu's traditional online marketing business offset gains, keeping the stock rangebound despite a reasonable valuation. Baidu is pivoting toward AI infrastructure and autonomous driving, with CEO Robin Li highlighting strong AI Cloud demand and Apollo Go's growth. Investors should watch for stabilization in legacy ad revenue, as AI growth alone may not drive a sustained stock rise, making moderate investment more prudent than aggressive buying.