Baidu (BIDU) Last Update 9/19/22
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TREFIS Analysis

Trefis Report
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Potential upside & downside to trefis price

Baidu Company


  1. Baidu Core constitutes 44% of the Trefis price estimate for Baidu's stock.


  1. Latest Earnings

Baidu posted a better than expected set of Q1 2022 results, despite the ongoing Covid-19 shutdowns in China, as demand for its cloud and artificial intelligence products remained strong. Revenue for the quarter rose by 1% year-over-year to 28.4 billion yuan ($4.48 billion) with revenue for the Baidu AI Cloud rising 45% year-over-year. However, the company swung to a net loss due to a write-down of some long-term investments.

  1. Delisting concerns in the United States

In late March 2022, the SEC added Baidu to a provisional watchlist of foreign companies that might face delisting from U.S. stock exchanges if they do not allow U.S. regulators to review their audit reports for three consecutive years. While Chinese companies are forbidden from sharing these reports currently, China has signaled that it might be willing to grant approval for greater audit transparency and disclosures.


Below are key drivers of Baidu's value that present opportunities for upside or downside to the current Trefis price estimate for Baidu:

Search Services

  • Baidu Core Revenue: We currently forecast these revenues by Baidu to increase from over $14.8 billion in 2021 to just over $17.6 billion by the end of the Trefis forecast period. If the growth in the Chinese economy - particularly the e-commerce market - outperforms expectations, Baidu could benefit from a larger base of advertisers willing to pay for ad slots and prioritized search results. As a result, Baidu could generate higher revenues than we currently forecast. In the event that the segment revenue increases by 10% continuously till the end of our forecast period, there could be an upside of about 20% to the Trefis price estimate.

  • iQiyi Revenues: We currently forecast iQiyi revenues to increase rapidly from $4.8 billion in 2021 to $8.5 billion by the end of our forecast period. Our assumption for the sustained growth in Baidu's paid subscriber base is mainly due to the expectation that internet penetration in China will continue to rise. In addition, the penetration of smartphones in China is also expected to drive demand for video consumption. If penetration levels in China fail to increase in the next decade or competing for streaming services capture a higher share of the market, the rate of growth of Baidu's user base could slow down. If iQiyi revenues increase by 15% continuously till the end of our forecast period, there could be an upside of about 8% to the Trefis price estimate.

For additional details, select a driver above or select a division from the interactive Trefis split for Baidu at the top of the page.


Touted as the Google of China, Baidu is the number one Chinese language search provider and the most visited website in China. Baidu's main search operation provides search for websites, audio files, and images.

Baidu offers a unique Chinese language search platform to both users and customers. This platform consists of its own websites as well as the Baidu Union, a network of third-party websites and software applications. By generating traffic from its users, Baidu is able to attract business customers that wish to advertise their products and services alongside Baidu's search results and on Baidu's web properties.


Baidu makes the majority of its money from its search operations. Baidu's search advertising business is driven by two important factors that contribute to its significance:

Search market share dominance in China

Baidu dominates the search advertising market in China, with an estimated market share of over 80% (by revenue).

Though Qihoo 360 and Sogou have emerged as credible players in the desktop online search market, Baidu has gained dominance over the country's mobile search market. Baidu also competes with Bing and Google China in the domestic search market.

Demand from online advertisers for keyword advertising on Baidu sites could continue to cause upward pressure on Baidu's Revenue per Search.

Low Internet penetration compared to developed countries

The Internet penetration rate has steadily increased but the Internet penetration rate remains low compared to developed countries (for example, the U.S, U.K, France, and Japan.

Relatively low penetration rates translate into better opportunities for growth as the user base still remains low compared to the total population of the state.


Booming Online Video Market in China

The Chinese online video market has exploded in recent years driven by the increasing penetration of smartphone users as well as high-speed internet in the region. This is expected to continue to drive iQiyi online video streaming revenues in the coming years.

Threat To Market Share

Baidu’s market share in desktop searches has decreased in recent years, as Qihoo 360 and Sogou have seen significant gains. Nevertheless, Baidu has been able to retain its dominance over the mobile search market (commanding more than 80% market share). Yet Qihoo 360 is taking aggressive measures to increase its share in the mobile search market. If it does so, it could make a serious dent in Baidu’s market leadership. Additionally, since Qihoo and Sogou are ramping up their search monetization, this could also impact Baidu’s ability to raise prices on ad units.

Growing Mobile Users

Driven by the rising adoption of mobile Internet and smartphones, Baidu's mobile search users are growing explosively. This has also contributed to increased monetization on the mobile platform.

Mobile revenue now comprises over 50% of overall revenues, as mobile search now accounts for over two-thirds of overall search traffic on Baidu, and its mobile monetization rate has improved over the past few quarters

O2O E-Commerce Initiatives To Drive Baidu's Growth In The Long Run

Baidu aims to fuel the next chapter of its growth with O2O e-commerce initiatives. These include services to connect users to merchants such as online travel, ticket booking, entertainment, food delivery, as well as grocery and other services. The company’s management expects this to be an RMB 10 trillion market opportunity.