Chinese tech giant Baidu Inc (BIDU) has announced that it is increasing its investments in cloud computing, AI education, AI platforms, chipsets, and data centers in the coming ten years. The move comes as part of China’s “New Infrastructure” policy to accelerate economic growth and industrial upgrade.
Under the plan, Baidu aims to have 5 million intelligent cloud servers by 2030- creating a combined computing capability equal to seven times the total power of the world’s existing top 500 supercomputers. BIDU also plans to train 5 million AI professionals within 5 years.
“New infrastructure–which encompasses emerging technologies like AI, cloud computing, 5G, IoT, and blockchain–will be the driver for China’s economic development in the coming decades,” commented Baidu CTO Haifeng Wang.
“As a world-leading AI platform company, Baidu is well positioned to make large contributions to the development of new infrastructure in China, which will support the implementation of AI applications in different industries.”
Baidu says it has already been working with over 200 Chinese universities and has trained more than 1 million AI experts. That’s with 7,000+ published AI patent applications in China, the highest in the country.
Meanwhile Baidu’s smart finance products serve nearly 200 financial institutions, and its intelligent healthcare products are used in 300 hospitals and 1500 grassroots medical institutions.
Baidu Brain, its AI open platform, is already in place in Chongqing, Suzhou, and other cities, supporting more intelligent city management, the company says.
Shares in Baidu are currently trading down 2.5% year-to-date, but analysts nonetheless have a bullish Strong Buy consensus on the stock. The average analyst price target of $144 indicates 17% upside potential lies ahead. (See BIDU stock analysis on TipRanks).
“While BIDU was negatively impacted by COVID-19 in 1Q, a recovery is underway as offline businesses resume activity and management believes its stronger mobile ecosystem will increase users’ lifetime value” commented Oppenheimer analyst Jason Helfstein.
After hosting a Zoom meeting with BIDU’s head of IR, Juan Lin, the analyst reiterated a buy rating on the stock with a $155 price target (26% upside potential). “We are now seeing competitive pressure subsiding and management has reduced investments to stabilize margins, making the stock a better value play” Helfstein added.
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