百度 (9888.HK): Baidu 3Q26 Preview: Cloud Carries the Quarter, Ads and Depreciation Cut Earnings; Trim PT, Stay OW

We maintain Overweight on Baidu but cut our 2026E and 2027E non-GAAP net income by 15% and 42% ahead of 3Q26 results. Two changes drive the cut: online marketing is weakening further with no reset in AI search monetization before Baidu sets its 2027 plan, and the 2026 step up in capex raises our depreciation assumption, most visibly in 2027E. Neither change touches the reason to own the stock: our case rests on GPU Cloud and Kunlunxin, and we expect 3Q26 to show AI Cloud Infra reaccelerating with better cash conversion. We forecast AI Cloud Infra revenue of about RMB8bn, up roughly 90% YoY and 10% QoQ, against an online marketing decline of about RMB3.1bn, with AI powered businesses reaching about 52% of Baidu General revenue. Group non-GAAP operating profit is expected at about RMB1.6bn, down 27% YoY and a 2026 low. We trim our Jun-2027 PTs to US$145 for BIDU US and HK$140 for 9888 HK from US$175 and HK$170.