Nomura upgrades Baidu on ‘cheap’ valuation, AI initiative

Nomura upgraded Baidu to Buy from Neutral with a price target of $145, up from $135. The “cheap valuation” following the stock’s 30% decline since the July peak plus the company’s resolution to buy back shares aggressively from now “seem to warrant the benefit of doubt” about its artificial intelligence initiative, the analyst tells investors in a research note. The firm says incremental downside risks appear limited at current share levels. Baidu’s Ernie Bot AI initiative “leads among its Chinese peers in terms of overall performance, which we think may give Baidu a head start in this increasingly competitive market,” writes Nomura.