iQiyi Inc.'s stock plummeted 5.30% during intraday trading on Wednesday, as the video streaming platform faced a double blow from analyst price target cuts and a growing controversy surrounding its aggressive push into AI-generated content.

The decline followed a series of negative developments, including Morgan Stanley lowering its price target on iQiyi to $1.50 from $2.10 while maintaining an Equal Weight rating. This downgrade came alongside similar bearish sentiment from other analysts, reflecting concerns about the company's strategic direction and financial performance.

The stock movement was primarily driven by backlash against iQiyi's recently announced AI actor database, which has sparked industry-wide criticism. At the iQiyi World Conference, CEO Gong Yu unveiled the Nadou Pro platform and AI Actor Library, claiming hundreds of performers had "joined" the initiative. However, multiple actors including Zhang Ruoyun, Yu Hewei, and Wang Churan quickly issued public denials, stating they had not authorized the use of their likenesses for AI applications. Gong Yu's subsequent comments suggesting that "live-action filming might become intangible cultural heritage in the future" further fueled public outrage and raised questions about the company's approach to industry relationships.

Analysts note that iQiyi's aggressive AI push comes amid significant financial pressure, with the company reporting declining revenues for two consecutive years and swinging to a net loss in 2025. The AI initiative appears to be part of a broader strategy to reduce content production costs, but the controversial rollout has damaged the company's reputation and created uncertainty about its future growth prospects.