In major news on Hong Kong stocks, Baidu, Inc. (HK:9888) announced that its AI-based chatbot, Ernie Bot, has reached the 200 million users mark, reflecting a growth of almost 100% from the previous update in December. In terms of enterprise clients, Ernie touched 85,000 users. Year-to-date, Baidu stock has lost 18% in trading.
Baidu is a Chinese technology company that continues to lead in technological advancements, transitioning from a search engine to a prominent AI innovator.
Baidu Riding the AI Wave
In March 2023, Ernie Bot became the first chatbot that was developed in China to compete against players like OpenAI’s ChatGPT. However, the chatbot was officially launched in August 2023 after getting the green light from the Chinese government, making it one of the initial eight AI chatbots sanctioned by Beijing.
On a global scale, Chinese generative AI services still significantly trail their Western rivals. AIcpb.com, a website that monitors user visits to online AI services, reports that OpenAI’s ChatGPT continues to reign as the world’s most popular generative AI service, with total traffic increasing by 9% to reach 1.86 billion views in March 2024. On the other hand, Ernie Bot witnessed a total of 14.9 million visits across its application and website last month.
Consequently, China has expedited approvals for AI services, particularly after emphasizing that AI is a critical battleground in technology where China must compete with the U.S.
Snapshot of Baidu’s 2023 Results
In its 2023 annual results, Baidu highlighted its outstanding performance in the fourth quarter, driven by its dedication to AI advancement. In Q4, the company recorded a 6% year-over-year rise in revenues, totaling $4.92 billion. The AI cloud business demonstrated strong momentum, resulting in a 9% growth in non-online marketing revenue to $1.17 billion in the fourth quarter. Over the full year, revenues increased by 9%, reaching about $19 billion.
Is Baidu a Good Stock to Buy Now?
According to TipRanks’ rating consensus, 9888 stock has received a Strong Buy rating, backed by Buy recommendations from six analysts. The Baidu share price forecast is HK$158.50, which implies an upside of 64% on the current trading level.
