Shares of the Chinese technology giant Baidu (NASDAQ:BIDU) have gained about 32% year-to-date, outperforming the broader market averages. However, the uptrend in BIDU stock is at risk as its AI (Artificial Intelligence) chatbot disappointed investors.
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Last month, Baidu unveiled the Ernie Bot to compete against OpenAI’s ChatGPT. However, the company launched the AI-powered chatbot through a recorded video, which didn’t sit well with investors who expected a real-time demo.
Bloomberg, citing data from the S&P Global Market Intelligence, reported that traders had sold about 2% of the free float of BIDU’s ADR (American Depositary Receipts), implying that they see a near-term downside.
The report highlighted that Kai Wang of Morningstar sees Baidu’s generative AI bot as a long-term growth catalyst. However, Wang believes that Baidu could find it hard to monetize it in the near term. Moreover, growing competition in the generative AI space remains a concern.
While Baidu stock could see short-term pressures, let’s leverage TipRanks’ stock forecast tool to check what analysts recommend for the company.
What’s the Prediction for BIDU Stock?
With 13 Buy, one Hold, and one Sell recommendations, BIDU stock sports a Strong Buy consensus rating on TipRanks. Meanwhile, these analysts’ average price target of $186.27 indicates 23.42% upside potential.
While analysts are bullish about the company’s prospects, our data shows that hedge funds sold 959.1K shares of BIDU in the last quarter. Nevertheless, BIDU stock has an Outperform Smart Score of eight on TipRanks.
