Baidu (BIDU) Last Update 5/16/24
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Baidu Core
Trefis Price
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TREFIS Analysis

Trefis Report
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Potential upside & downside to trefis price

Baidu Company


  1. Baidu Core constitutes 19% of the Trefis price estimate for Baidu's stock.
  2. Online Video (iQiyi) constitutes 14% of the Trefis price estimate for Baidu's stock.


  1. Latest Earnings

Baidu posted a better-than-expected set of Q1 2024 results. While revenue rose 1% year-over-year to $4.36 billion, adjusted earnings came in at $2.76 per share. Earnings were driven by higher sales of online marketing services and AI cloud tools.

  1. Focus on Generative AI

While Baidu has been spending heavily on AI-related research, the company is looking to double down on deploying the technology to consumers. The company is launching a rival to OpenAI's ChatGPT chatbot called Earnie bot which is expected to integrate across all the company's offerings, beginning with search.


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 $15.9 billion in 2023 to about $21 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. If the segment revenue increases to $24 billion by the end of our review period, there could be an upside of about 10% to the Trefis price estimate.

  • iQiyi Revenues: We currently forecast iQiyi revenues to increase rapidly from $4.9 billion in 2023 to $7 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 market share, the growth rate of Baidu's user base could slow down. If iQiyi revenues increase to $9 billion, there could be a 5% upside to our 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 and 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 who 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 country's total population.


Booming Online Video Market in China

The Chinese online video market has exploded in recent years, driven by the increasing penetration of smartphone users and 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 retained 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.

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, grocery, and other services. The company's management expects this to be an RMB 10 trillion market opportunity.