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META's Llama models power Meta AI, supporting product innovation and user engagement into Q3 2025.
META's higher P/E of 24.99x reflects investor confidence in near-term AI monetisation and earnings growth.
The artificial intelligence revolution has positioned two tech giants at the forefront of innovation and investor attention. Baidu (BIDU - Free Report) , China’s leading search and AI company and Meta Platforms (META - Free Report) , the social media conglomerate behind Facebook and Instagram, represent contrasting yet compelling approaches to AI monetisation. Both are investing heavily in foundation models, cloud infrastructure and next-generation computing, though they operate in very different markets and regulatory settings.
Each company shares the ambition to scale large language models, expand cloud capabilities and build immersive digital experiences that redefine how technology fits into everyday life. As BIDU and META develop formidable AI ecosystems while pursuing distinct growth paths, the question for investors is which presents the stronger opportunity. Let’s delve deeper to find out.
The Case of BIDU
Baidu’s transformation into an AI-first enterprise is reshaping both its growth composition and financial trajectory. The company leads China’s AI ecosystem through three key pillars - AI Cloud, autonomous driving and the modernisation of its search platform. Its four-layer architecture spanning infrastructure, frameworks, models and applications enables deeper enterprise integration and supports long-term scalability across sectors.
In the second quarter of 2025, total revenues declined 4% year over year, as softer online marketing trends offset strength in newer businesses. Baidu Core revenues reached RMB 26.3 billion ($3.66 billion), with non-online marketing revenues up 34%, driven by rising enterprise demand for AI-powered cloud and generative solutions. This reflects an ongoing shift toward AI-led businesses, partly offset by slower legacy advertising.
However, higher investment intensity continues to weigh on profitability. Operating income declined 45%, reflecting higher infrastructure and compute costs linked to large-scale AI deployments. The rollout of generative and multimodal search features remains in early stages, limiting near-term monetization, while investments in model training and autonomous mobility continue to lift expenses. The Zacks Consensus Estimate for third-quarter 2025 revenues is pegged at $4.34 billion, indicating a 9.33% year-over-year decline. The consensus mark for EPS is pegged at $7.51, down by 9.7% over the past 30 days, indicating a 28.66% year-over-year decline. These trends reflect a temporary recalibration as Baidu invests heavily to build durable, high-margin AI platforms.
Meta Platforms stands at the forefront of AI innovation, embedding artificial intelligence across products, infrastructure and user experiences. Its Family of Apps — Facebook, Instagram, WhatsApp and Messenger — benefits from AI-driven personalization that enhances engagement and monetization. In the second quarter of 2025, revenues rose 22% year over year to $47.52 billion, reflecting steady growth as AI-powered recommendation systems improved content discovery and retention.
AI remains central to META’s growth roadmap. The Llama 4.1 and 4.2 foundation models power Meta AI across platforms, improving translation, search and content delivery. More than one billion users interact with Meta AI monthly, signaling strong early traction. Reality Labs — developer of the Ray-Ban Meta glasses and Quest headsets — extends the company’s broader vision of integrating AI into everyday devices.
META continues to maintain strong profitability metrics, supported by scale efficiency and disciplined cost management. In the second quarter of 2025, operating income reached $20.44 billion, up 38% year over year, with a 43% operating margin, reflecting healthy operating leverage across its ecosystem. The Zacks Consensus Estimate for third-quarter 2025 revenues is pegged at $49.39 billion, implying a 21.68% year-over-year increase, while earnings per share are projected at $6.74, unchanged over the past 30 days and up 11.77% year over year. These projections reinforce its consistent execution and sustained AI-driven growth momentum.
Meta Platforms commands a valuation premium over Baidu, supported by stronger profitability, predictable cash flows and consistent execution. META trades at a forward 12-month P/E of 24.99x, compared with Baidu’s 16.48x, reflecting investor confidence in its ability to monetise AI infrastructure and sustain double-digit earnings growth. Baidu’s lower multiple, while offering potential upside, stems from compressed near-term margins as the company continues to reinvest heavily in AI and cloud expansion. Meta Platforms’ valuation, though higher, appears well-justified given its scale, margin strength and clearer visibility into monetisation from AI-powered products.
BIDU vs. META: P/E F12M Ratio
Image Source: Zacks Investment Research
Baidu’s shares have climbed 57.1% year to date, reflecting renewed investor optimism around its AI transformation and early traction in enterprise cloud adoption. The rally, however, has been largely sentiment-driven as earnings remain under pressure from elevated reinvestment. Meta Platforms' shares have advanced 25.3% during the same period, supported by consistent earnings growth, margin expansion and visible AI monetisation across its platforms. While Baidu’s surge highlights recovery potential, META’s steadier performance reflects durable, fundamentals-led momentum and stronger investor conviction in long-term value creation.
BIDU vs. META: YTD Performance
Image Source: Zacks Investment Research
Conclusion
Both Baidu and Meta Platforms are expanding aggressively in artificial intelligence, but their growth trajectories differ in maturity and visibility. BIDU’s reinvestment cycle and evolving monetization strategy reflect a longer runway toward stable profitability, while META’s integrated AI ecosystem across consumer and enterprise platforms positions it for more immediate benefit. With stronger execution visibility and scalable product innovation, Meta’s business prospects offer better upside potential. Meta Platforms carries a Zacks Rank #2 (Buy) at present, and investors may consider it a preferred pick over Baidu, which currently has a Zacks Rank #3 (Hold).
Image: Bigstock
Baidu vs. Meta: Which AI Powerhouse is the Smarter Buy Right Now?
Key Takeaways
The artificial intelligence revolution has positioned two tech giants at the forefront of innovation and investor attention. Baidu (BIDU - Free Report) , China’s leading search and AI company and Meta Platforms (META - Free Report) , the social media conglomerate behind Facebook and Instagram, represent contrasting yet compelling approaches to AI monetisation. Both are investing heavily in foundation models, cloud infrastructure and next-generation computing, though they operate in very different markets and regulatory settings.
Each company shares the ambition to scale large language models, expand cloud capabilities and build immersive digital experiences that redefine how technology fits into everyday life. As BIDU and META develop formidable AI ecosystems while pursuing distinct growth paths, the question for investors is which presents the stronger opportunity. Let’s delve deeper to find out.
The Case of BIDU
Baidu’s transformation into an AI-first enterprise is reshaping both its growth composition and financial trajectory. The company leads China’s AI ecosystem through three key pillars - AI Cloud, autonomous driving and the modernisation of its search platform. Its four-layer architecture spanning infrastructure, frameworks, models and applications enables deeper enterprise integration and supports long-term scalability across sectors.
In the second quarter of 2025, total revenues declined 4% year over year, as softer online marketing trends offset strength in newer businesses. Baidu Core revenues reached RMB 26.3 billion ($3.66 billion), with non-online marketing revenues up 34%, driven by rising enterprise demand for AI-powered cloud and generative solutions. This reflects an ongoing shift toward AI-led businesses, partly offset by slower legacy advertising.
However, higher investment intensity continues to weigh on profitability. Operating income declined 45%, reflecting higher infrastructure and compute costs linked to large-scale AI deployments. The rollout of generative and multimodal search features remains in early stages, limiting near-term monetization, while investments in model training and autonomous mobility continue to lift expenses. The Zacks Consensus Estimate for third-quarter 2025 revenues is pegged at $4.34 billion, indicating a 9.33% year-over-year decline. The consensus mark for EPS is pegged at $7.51, down by 9.7% over the past 30 days, indicating a 28.66% year-over-year decline. These trends reflect a temporary recalibration as Baidu invests heavily to build durable, high-margin AI platforms.
Baidu, Inc. Price and Consensus
Baidu, Inc. price-consensus-chart | Baidu, Inc. Quote
The Case for META
Meta Platforms stands at the forefront of AI innovation, embedding artificial intelligence across products, infrastructure and user experiences. Its Family of Apps — Facebook, Instagram, WhatsApp and Messenger — benefits from AI-driven personalization that enhances engagement and monetization. In the second quarter of 2025, revenues rose 22% year over year to $47.52 billion, reflecting steady growth as AI-powered recommendation systems improved content discovery and retention.
AI remains central to META’s growth roadmap. The Llama 4.1 and 4.2 foundation models power Meta AI across platforms, improving translation, search and content delivery. More than one billion users interact with Meta AI monthly, signaling strong early traction. Reality Labs — developer of the Ray-Ban Meta glasses and Quest headsets — extends the company’s broader vision of integrating AI into everyday devices.
META continues to maintain strong profitability metrics, supported by scale efficiency and disciplined cost management. In the second quarter of 2025, operating income reached $20.44 billion, up 38% year over year, with a 43% operating margin, reflecting healthy operating leverage across its ecosystem. The Zacks Consensus Estimate for third-quarter 2025 revenues is pegged at $49.39 billion, implying a 21.68% year-over-year increase, while earnings per share are projected at $6.74, unchanged over the past 30 days and up 11.77% year over year. These projections reinforce its consistent execution and sustained AI-driven growth momentum.
Meta Platforms, Inc. Price and Consensus
Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote
Valuation and Price Performance Comparison
Meta Platforms commands a valuation premium over Baidu, supported by stronger profitability, predictable cash flows and consistent execution. META trades at a forward 12-month P/E of 24.99x, compared with Baidu’s 16.48x, reflecting investor confidence in its ability to monetise AI infrastructure and sustain double-digit earnings growth. Baidu’s lower multiple, while offering potential upside, stems from compressed near-term margins as the company continues to reinvest heavily in AI and cloud expansion. Meta Platforms’ valuation, though higher, appears well-justified given its scale, margin strength and clearer visibility into monetisation from AI-powered products.
BIDU vs. META: P/E F12M Ratio
Image Source: Zacks Investment Research
Baidu’s shares have climbed 57.1% year to date, reflecting renewed investor optimism around its AI transformation and early traction in enterprise cloud adoption. The rally, however, has been largely sentiment-driven as earnings remain under pressure from elevated reinvestment. Meta Platforms' shares have advanced 25.3% during the same period, supported by consistent earnings growth, margin expansion and visible AI monetisation across its platforms. While Baidu’s surge highlights recovery potential, META’s steadier performance reflects durable, fundamentals-led momentum and stronger investor conviction in long-term value creation.
BIDU vs. META: YTD Performance
Image Source: Zacks Investment Research
Conclusion
Both Baidu and Meta Platforms are expanding aggressively in artificial intelligence, but their growth trajectories differ in maturity and visibility. BIDU’s reinvestment cycle and evolving monetization strategy reflect a longer runway toward stable profitability, while META’s integrated AI ecosystem across consumer and enterprise platforms positions it for more immediate benefit. With stronger execution visibility and scalable product innovation, Meta’s business prospects offer better upside potential. Meta Platforms carries a Zacks Rank #2 (Buy) at present, and investors may consider it a preferred pick over Baidu, which currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.