STOCKS | Morgan Stanley Cuts Baidu Target Price to $130, Keeps Equal-Weight Rating

Morgan Stanley lowered its target price for Baidu to $130 from $140 and maintained an equal-weight rating. According to Jin10, Morgan Stanley expected Baidu (09888.HK) core revenue in the second quarter of 2026 to fall 4% year over year to 25.3 billion yuan. It said the AI cloud infrastructure business was strong, with revenue expected to rise 56% year over year to 7.6 billion yuan, which could partly offset an 18.5% decline in advertising revenue. Citing weak advertising performance, Morgan Stanley cut its forecasts for Baidu's 2026 and 2027 core revenue by 3%. It also lowered its operating profit forecast by 11% to 12% to reflect increased AI investment.