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Baidu (BIDU) controls approximately 60% of China’s search engine market and reported a 42% revenue growth in its AI Cloud division in Q1 2025. However, it faces challenges, including a 6% year-over-year decline in online marketing revenue and negative free cash flow of RMB 9.2 billion due to rising investments in AI infrastructure and autonomous driving.
Alphabet (GOOGL) generated around $95.3 billion in cash and marketable securities, with approximately $19 billion in free cash flow in the most recent quarter. It operates YouTube, a $30 billion-a-year business, and its forward price-to-sales ratio is 5.89, compared to Baidu’s 1.51. Alphabet’s growth is bolstered by its global presence, and it is investing $75 billion in capital expenditures for AI infrastructure in 2025.
As of now, GOOGL is rated a Zacks Rank #3 (Hold) while BIDU holds a Zacks Rank #5 (Strong Sell). Analysts predict an 18.3% growth in GOOGL’s earnings per share while BIDU’s estimate indicates a 10.5% decline for 2025, making Alphabet the more favorable investment option.
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