Core Viewpoint - Baidu Group is expected to face a decline in total revenue and core revenue in Q2 2025, with a projected total revenue decrease of 4.2% year-on-year to 32.52 billion RMB and a core revenue decline of 3.6% to 25.72 billion RMB, indicating that the company's performance is at a low point due to pressure on its high-margin advertising business [1][2]. Group 1: Online Marketing Business - The online marketing service revenue is anticipated to drop by 15.7% year-on-year in Q2 2025, primarily due to the transitional impact of AI integration in search services, which is putting pressure on core advertising revenue [2]. - Baidu's search products and interaction methods are undergoing a comprehensive upgrade, enhancing AI experiences with features like natural language input and multi-modal queries, which may improve user engagement and conversion efficiency in the medium term [2]. - The launch of the ad-free smart search app "TizzyAI" focuses on AI-driven content aggregation and logical reasoning, showing promising performance in search purity and content structuring [2]. Group 2: Non-Online Marketing Business - The non-online marketing business revenue is expected to grow by 27% year-on-year in Q2 2025, with cloud services contributing significantly to this growth [2]. - The "LuoBo Kuaipao" service continues to grow, with a 75% year-on-year increase in order volume in Q1 2025, and a strategic partnership with Uber aims to deploy thousands of autonomous vehicles in Asia and the Middle East [3]. - Baidu's Wenxin large model technology is evolving, enhancing multi-modal and reasoning capabilities, which may increase enterprise deployment willingness [3]. Group 3: Financial Forecasts and Valuation - Baidu's total revenue is projected to decline from 134.6 billion RMB in 2023 to 129.1 billion RMB in 2025, with a negative growth rate of 3.04% [5][10]. - The Non-GAAP net profit is expected to decrease significantly from 28.75 billion RMB in 2023 to 17.96 billion RMB in 2025, reflecting a growth rate decline of 33.48% [5][10]. - The company has adjusted its valuation multiples for advertising, smart cloud, and other businesses to 10.0x PE and 2.5x PS, with a target price reduction to 109.4 HKD, while maintaining a "buy" rating due to strong demand in the AI model industry [4].

Core Viewpoint - Baidu Group is expected to experience a decline in total revenue and core revenue in Q2 2025, with a focus on the challenges faced in its online marketing business and the ongoing transformation towards AI-driven services [3][4]. Group 1: Online Marketing Business - Baidu's core revenue is projected to be 257.2 billion yuan in Q2 2025, a year-on-year decrease of 3.6%, with online marketing service revenue declining by 15.7% due to the transitional impact of AI integration [4]. - The search product and interaction methods are undergoing a comprehensive upgrade, enhancing AI experiences with support for natural language input and multi-modal queries, which may improve user engagement and conversion efficiency in the medium term [4]. - Baidu has launched an ad-free intelligent search app "TizzyAI," focusing on AI-driven content aggregation and logical reasoning, showing promising performance in search purity and content structuring [4]. Group 2: Non-Online Marketing Business - Non-online marketing business revenue is expected to reach 95.4 billion yuan in Q2 2025, reflecting a year-on-year growth of 27%, primarily driven by cloud services [5]. - The "萝卜快跑" service continues to grow, with a 75% increase in order volume in Q1 2025, and a strategic partnership with Uber aims to deploy thousands of autonomous vehicles in Asia and the Middle East [5]. - The Wenxin large model technology is evolving, with the release of Wenxin 4.5 Turbo and X1 Turbo, significantly reducing reasoning costs and achieving high multi-modal capabilities, which may enhance enterprise deployment willingness [5]. - Baidu's new digital human technology "NOVA" integrates advanced AI capabilities, potentially improving the naturalness of interactions and supporting dual-person interactions [5]. - Traditional content products are increasingly AI-driven, with the launch of the "沧舟OS" system enhancing video and document integration, leading to a rise in monthly active users for AI features in Baidu's library and cloud services [6].

Group 1 - The 2025 World Artificial Intelligence Conference showcased unprecedented scale, with over 800 companies and more than 3,000 cutting-edge exhibits, including 40 large models and 60 smart robots [2][5] - Baidu introduced its new digital human technology, NOVA, which aims to replicate top-tier influencer capabilities and is expected to be available to the industry by October [5][6] - The AI-powered educational tool, Youdao AI Answering Pen SpaceOne, integrates advanced AI models to assist students in problem-solving across various subjects [6][8] Group 2 - Black Lake Technology presented its AI Agent-based flexible manufacturing solution, which enhances order response speed and fulfillment efficiency for small and medium-sized factories [11][12] - SenseTime launched its embodied intelligence platform "Wuneng," designed to provide robots and smart devices with advanced perception and interaction capabilities [12][13] - Wuneng aims to facilitate interaction between intelligent devices and the real world, enhancing operational efficiency in various applications [12][13] Group 3 - The conference emphasized the importance of international collaboration in AI governance to ensure the development of "good AI" that does not threaten human existence [15][17] - Discussions highlighted the need for equitable access to AI technology and the importance of addressing safety concerns to benefit all nations [17][18] - Experts called for effective regulation of AGI to minimize risks and ensure it serves as a global public resource [18]