Can NASDAQ:BIDU Surge Above $200? How Will AI and Robotaxi Businesses Impact Baidu’s Future Price?

Baidu’s Strategic Growth Amid Political Uncertainty: A Deep Dive into NASDAQ:BIDU's Future Prospects

Baidu’s Position in China’s Technology Landscape

NASDAQ:BIDU, one of the largest tech companies in China, has faced a prolonged battle to regain momentum after its advertising business was hit by global economic slowdowns in the aftermath of the pandemic. The company, known as “China’s Google,” has taken a bold approach by pushing heavily into artificial intelligence (AI) and autonomous vehicles, aiming to diversify its business beyond its traditional search and advertising operations. Over the past year, BIDU has made significant investments in AI and robotaxi services through its Apollo platform, and 2025 is expected to be a pivotal year for these high-growth segments.

Despite facing potential delisting risks, NASDAQ:BIDU remains undervalued in comparison to its peers, trading at a low multiple of 8.7x forward earnings, which stands in stark contrast to its competitors. This valuation suggests that BIDU is trading at a steep discount to the broader market, particularly considering the growth prospects in AI and autonomous driving. This makes the stock an attractive opportunity for investors seeking exposure to China’s burgeoning technology sector, particularly as the country’s economic recovery continues to unfold.

AI and Robotaxi Growth Catalysts: Baidu’s Path Forward

AI and robotaxi services are central to BIDU's growth strategy moving forward. The company’s ERNIE AI platform has become a key revenue driver within its Cloud business. In early 2025, BIDU revealed that ERNIE was handling around 1.65 billion API calls daily, representing a 178% increase from the previous quarter. This surge in activity demonstrates that Baidu’s AI user acquisition strategy is paying off. Baidu’s competitive pricing of its API services, combined with its growing cloud infrastructure, positions the company to capitalize on the rapidly expanding market for large language models (LLMs), which are expected to grow nearly threefold by 2026.

Additionally, BIDU's Apollo Go robotaxi service is set to become a key contributor to the company’s revenue by 2025. Apollo Go, which operates in cities like Wuhan, Hong Kong, and now Dubai, continues to mature and expand its footprint in the autonomous vehicle space. This segment could provide high-margin revenue for BIDU in the coming years, offering a unique growth driver in addition to its traditional businesses.

Cloud Services and Search: A Mixed Bag of Performance

Despite some challenges in its core search and advertising business, BIDU's Cloud division has returned to growth, achieving a 17% year-over-year increase in revenue to approximately $3 billion. This strong performance underscores the increasing demand for cloud computing in China and highlights Baidu’s ability to diversify its revenue streams. Baidu’s growing share in the AI-driven cloud services market, fueled by its ERNIE platform, is expected to continue to support its Cloud business as the demand for AI infrastructure surges.

On the other hand, Baidu’s search business, which has long been the backbone of its revenue model, is facing headwinds due to macroeconomic pressures in China. However, recent signals from China’s economy, such as the country’s strong GDP growth of 5.4% in Q1 2025 and Q4 2024, suggest that Baidu’s search business may see a resurgence in the near future. This growth is likely to be driven by increased digital advertising demand as Chinese consumer spending picks up, which bodes well for Baidu’s online marketing segment, despite slower-than-expected growth in this area.

Baidu’s Discounted Valuation: A Bargain for Investors?

NASDAQ:BIDU is currently trading at a valuation multiple of 8.7x forward earnings, which is significantly lower than the sector median and 41% cheaper than its five-year average. When compared to other major Chinese tech companies like Alibaba (BABA), Baidu is considerably undervalued, especially considering the growth potential in AI, autonomous vehicles, and its cloud business. Additionally, BIDU is trading at a 24% discount to the MSCI China Index, which tracks the largest stocks in China, including other prominent tech companies.

Analysts have also been increasing their earnings per share (EPS) estimates for BIDU, which suggests growing confidence in the company’s growth trajectory. Over the past three months, Baidu’s EPS estimates have been revised upward by 1% and 2.6%, respectively, indicating a positive outlook for the company’s earnings. Despite some short-term challenges, BIDU remains one of the most attractive undervalued tech stocks in China, particularly when considering its strong fundamentals and growth catalysts.

Geopolitical Risks: Delisting and Political Tensions

One of the major risks to BIDU comes from the ongoing geopolitical tensions between the U.S. and China, particularly the possibility of Chinese stocks being delisted from U.S. exchanges. A recent letter from U.S. lawmakers urged the SEC to delist 25 Chinese companies, including BIDU, due to alleged ties to the Chinese government and military. While these concerns are not immediately likely to result in a delisting, they underscore the heightened political risks that BIDU faces in the current environment. If the U.S. were to move forward with delisting Chinese stocks, it would limit access to U.S. investors and reduce liquidity for these companies. However, as BIDU is already listed on the Hong Kong Stock Exchange, it could still find alternative sources of capital and investor interest outside of the U.S. market.

Regulatory Challenges: Risks and Opportunities in the Chinese Market

China’s regulatory environment remains another key risk for BIDU. While the Chinese government has moved to support the economy through stimulus measures, the broader political climate remains unpredictable. Trade wars and tariffs between the U.S. and China continue to create uncertainties for Chinese companies operating in the global market. However, Baidu’s ability to innovate in AI and autonomous vehicles, along with its expanding international footprint in places like Dubai and Hong Kong, offers it a degree of resilience against these risks.

Baidu’s Earnings Outlook: Strong Fundamentals Despite Geopolitical Headwinds

Despite the geopolitical risks and market volatility, BIDU has consistently demonstrated solid fundamentals. In its most recent quarter, Baidu surpassed earnings expectations, with an EPS of $2.64, beating estimates by 78 cents. Revenue for the quarter was $4.69 billion, also a solid beat. For the upcoming quarter, analysts are forecasting an EPS of $1.90 and revenue of $4.27 billion, with upward revisions to EPS estimates indicating growing confidence in the company’s performance. Baidu’s strong free cash flow, improving margins, and profitability remain solid, and the company is well-positioned to continue benefiting from its AI and autonomous driving initiatives in 2025 and beyond.

Final Thoughts on NASDAQ:BIDU: Hold Amidst Political Uncertainty

In conclusion, BIDU remains a compelling investment despite the geopolitical and regulatory risks that it faces. The company’s efforts to pivot toward AI and autonomous vehicles are starting to pay off, and the macroeconomic environment in China is showing signs of recovery, which could provide a boost to its core businesses. While the delisting risk and political tensions between the U.S. and China remain a concern, BIDU’s strong fundamentals and undervalued stock price make it a potential long-term growth opportunity.

Given the current risks and growth prospects, NASDAQ:BIDU is rated as a Hold, with eyes on how geopolitical developments unfold. The company’s ability to capitalize on its AI and robotaxi ventures will be crucial in determining whether its stock price can outperform in the coming months. For those looking for exposure to China’s tech sector, BIDU presents an opportunity at a discounted valuation, but caution should be exercised regarding political risks.

Stock Rating: Hold

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