Baidu: A Q1 Earnings Beat, New Dividend, But Shares Fully Valued (Downgrade)

Baidu, Inc. is downgraded to Hold after a 45% rally, with shares now near fair value and technicals mixed. Q1 results showed a bottom-line beat and strong AI Cloud Infra growth, but core revenue declined for the fourth straight quarter. BIDU initiated a $5 billion buyback and its first dividend, signaling balance sheet confidence despite negative free cash flow and tepid EPS outlook.