Baidu, Inc. (NASDAQ:BIDU) is one of the Hot AI Stocks to Keep on Your Radar. On October 10, Macquarie upgraded the stock to “Outperform” from “Neutral” and raised the price target to $176 from $91.
The firm stated that it sees “hidden value” in the internet services company, particularly with its transition to diversified revenue streams. The company has been shifting away from its weakening search business because of increased pressure from competition with short-video and social platforms.
The company’s core advertising revenue is set to decline through late 2025, but the firm said that weakness is already priced in. That said, investors should shift their attention to newer growth drivers such as AI cloud services, robotaxis, and chips.
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Baidu’s stock has surged 57% year-to-date driven by strength in its artificial intelligence (AI) cloud business and growing investor confidence in its Kunlun in-house AI chip.
The firm noted that Kunlun’s AI chips could make up for an estimated one-third of the company’s valuation as shipments ramp and China pushes for greater self-sufficiency in semiconductor production.
“We see Baidu pivoting towards more diversified revenue streams, with positive option value arising from both AI cloud and robotaxis.”
Baidu, Inc. (NASDAQ:BIDU) is a Chinese internet giant and AI pioneer, known for its noteworthy investments in artificial intelligence technology and its position as the dominant search engine within the country.
While we acknowledge the potential of BIDU as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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