Top Macquarie analyst Ellie Jiang upgraded Chinese search engine giant Baidu (BIDU) from Hold to Buy and boosted the stock’s price target to $176 from $91. The analyst highlighted the company’s pivot towards diversified revenue streams as the reason for her upgrade. BIDU stock has risen 57% year-to-date, driven by strength in its artificial intelligence (AI) cloud business and optimism about its Kunlun in-house AI chip.
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Top Macquarie Analyst Turns Bullish on BIDU Stock
Jiang highlighted that Baidu has been undergoing a challenging transition period since 2022 due to growing intense screen time competition in China from short-video platforms like Douyin and Kuaishou, as well as emerging social media channels such as Xiaohongshu. While Baidu continues to revamp its core search business, the analyst is optimistic about the company as it has pivoted towards more diversified revenue streams with cloud, AI chips, and robotaxis emerging as “more tangible drivers.”
The 5-star analyst noted that Chinese enterprise demand is entering an inflection point, given the accelerated AI cloud adoption. He believes that Baidu, one of China’s leading cloud service providers (CSPs), is well-positioned to benefit from the growing AI cloud adoption due to its strong distribution channels and foundation model capabilities. Moreover, Jiang noted that channel checks indicate that Baidu’s homegrown Kunlun chips continue to gain traction with accelerated shipments to external customers. The growing preference for Baidu’s in-house chips comes amid China’s broader push for AI chip self-sufficiency.
While Baidu has yet to disclose concrete plans for its Kunlun chip, Jiang is confident about the road ahead. The analyst believes that the acceleration of domestic chipmaker initial public offerings (IPOs), with nearly 50 Chinese chip companies gearing up to go public as of the first half of 2025, will drive “continued confidence with a clearer industry outlook and valuation benchmark.”
Is Baidu a Good Stock to Buy?
Currently, Wall Street has a Moderate Buy consensus rating on Baidu stock based on nine Buys, five Holds, and two Sell recommendations. The average BIDU stock price target of $124.35 indicates 6.1% possible downside risk from current levels.
