Baidu's Robotaxi Has been Getting Closer To Scalable Adoption With Unit Economics Breakeven In Sight: Goldman Sachs

Core Viewpoint - Goldman Sachs analyst Lincoln Kong maintains a Buy rating on Baidu, Inc with a price target of $129, citing ongoing AI search renovation initiatives impacting near-term ad revenue growth [1][2]. Group 1: Advertising and Revenue - Near-term advertising revenue growth is under pressure due to Baidu's AI search renovation, which has not yet been monetized [1][2]. - Baidu has increased the proportion of AI-generated content in search results from 11% in mid-May to 18% [2]. - The company projects third-quarter revenue of 33.95 billion Chinese Yuan [3]. Group 2: AI and Cloud Business - AI-cloud revenue is accelerating, with contributions from Artificial Intelligence Global Company (AIGC) becoming a larger portion of overall revenue [1][2]. - The AI cloud has shown improvement in Q2 2024, supported by smart transportation and AIGC-related revenue [2]. Group 3: Autonomous Driving - Autonomous driving initiatives are making progress in narrowing losses, with expectations of breakeven in unit economics for Robotaxi [2]. - The disciplined control of costs and operating expenditures is likely to help maintain stable margins alongside the growth of the cloud business and reduced losses from autonomous driving [2]. Group 4: Stock Performance - Baidu's stock traded higher by 1.03% at $86.58 during the last check on Monday [3].