Baidu, Inc. BIDU shares have gained 7.8% in the past month, above the Zacks Internet – Services industry’s 3.4% increase and the Zacks Computer and Technology sector’s rise of 4.5%. Despite this uptick, BIDU remains about 25.4% below its 52-week high of $116.25 (versus a low of $74.71). In fact, the stock is up by only 3% year to date (YTD) against the industry’s 11.8% decline.
Additionally, as the threat of delisting Chinese stocks from U.S. markets is escalating, does Baidu now present an attractive entry point, or are there further challenges ahead? Could this be a good opportunity to invest in this AI stock now?
BIDU Share Price Performance
Zacks Investment Research
Image Source: Zacks Investment Research
What Technical Indicators Suggest for Baidu Stock
Baidu shares are trading below the 50-day and 200-day moving averages, indicating a bearish trend.
Zacks Investment Research
Image Source: Zacks Investment Research
Let’s analyze the company’s prospects.
Baidu Explores AI Translation for Animal Communication
Chinese tech giant Baidu has filed a patent proposing an AI-powered system to translate animal vocalizations, particularly those of pets like cats, into human language. The technology would analyze data such as sounds, behaviors, and physiological signals to identify an animal’s emotional state, then map those emotions to semantic meanings. While still in the research phase, Baidu envisions this system as a way to enhance emotional understanding and communication between animals and humans. The move aligns with Baidu’s broader push into AI, following its development of the Ernie 4.5 Turbo model.
Ramping up AI Product Offerings
In April 2025, Baidu unveiled its latest AI model, ERNIE 4.5 Turbo, at the Baidu Create 2025 developer conference, marking a significant advancement in its artificial intelligence capabilities. ERNIE 4.5 Turbo processes and generates content across various formats, including text, images, audio, and video, enhancing its versatility in applications such as content creation and customer service. Baidu has significantly reduced the pricing for ERNIE 4.5 Turbo, offering it at 20% of ERNIE 4.5's cost and approximately 0.2% of GPT-4.5's rates, making advanced AI more accessible to developers and businesses. Alongside ERNIE 4.5 Turbo, Baidu introduced ERNIE X1 Turbo, a reasoning model designed to excel in tasks requiring deep thinking and logical analysis. It boasts enhanced capabilities in question answering, literary creation, and logical reasoning, outperforming comparable models like DeepSeek's R1 while being offered at half the cost.
Baidu’s leadership in AI – from ERNIE Bot (one of China’s leading generative AI platforms) to autonomous driving – could pay off handsomely as these technologies commercialize. The company is already monetizing AI cloud services at a rapid clip, and wider AI adoption in China’s enterprises and government could drive a new growth cycle. Furthermore, Baidu’s core search business, although mature, remains a cash cow with a dominant market share in China. If China’s economy accelerates or advertising spend bounces back, Baidu could see a resurgence in its high-margin ad revenue.
BIDU’s Apollo Go Robotaxi Business Gains Scale
Baidu’s autonomous ride-hailing service, Apollo Go, provided over 1.1 million rides in the fourth quarter of 2024, marking a 36% year-over-year increase. By January 2025, total public rides surpassed 9 million. In November 2024, Apollo Go became the first and only service authorized to conduct robotaxi testing in Hong Kong, its first entry into a right-hand drive market. Since February 2025, Apollo Go has begun fully driverless operations across China.
The company is actively pursuing an asset-light expansion strategy, leveraging partnerships with local fleet operators and mobility service providers. This collaborative approach positions Apollo Go for accelerated fleet growth and higher ride volumes through 2025 while enhancing operational efficiency and paving the way for international scaling.
Baidu’s AI Cloud Acceleration, Solid Customer Base & Robust AI Infrastructure
Baidu’s AI Cloud revenue surged 26% year over year in the fourth quarter of 2024, contributing to a 17% full-year increase. Notably, generative AI-related revenue nearly tripled in 2024, underscoring strong enterprise demand for the ERNIE model and robust AI infrastructure. Baidu has built a diversified customer base spanning sectors like Internet services, automotive, manufacturing, energy, and finance, complemented by rapid adoption among mid-tier businesses. Enhanced by the Tianfeng MaaS platform, which offers a comprehensive suite of high-quality models and fine-tuning tools, Baidu ensures enterprise clients can seamlessly integrate AI into operations. With steady improvements in model performance and declining costs, Baidu anticipates accelerated adoption, leading to sustained revenue growth and expanding non-GAAP operating margins through 2025.
Baidu’s Solid Financial Foundation
Baidu closed 2024 with a solid net cash position of approximately RMB 170.5 billion and a free cash flow of RMB 13.1 billion. Operational efficiency is improving, evidenced by declining personnel-related expenses and stable operating expenses. Baidu continues to allocate capital prudently, prioritizing high-ROI investments across AI, cloud services, and autonomous driving. Notably, the company repurchased more than $1 billion of shares in 2024, as part of its broader $5 billion buyback program, which is scheduled to run through December 2025. Management has committed to accelerating buybacks, underscoring confidence in long-term prospects and dedication to shareholder value creation.
BIDU’s Headwinds
Despite the potential, Baidu faces significant risks. The core business stagnation is a real concern – search advertising is a maturing market, and Baidu is challenged by competitors like ByteDance, which is drawing advertising spend to its TikTok/Douyin platforms, and Tencent’s ad ecosystem. Its core online marketing revenue decreased 7% in the fourth quarter and 3% in 2024.
Moreover, AI and cloud competition is fierce, Giants like Alibaba BABA and Tencent TCEHY, as well as startups, are all vying for AI supremacy in China. Alibaba Cloud (Aliyun) is the leading cloud provider in China, offering a wide range of enterprise services. It invests heavily in AI through its DAMO Academy, with a focus on NLP, computer vision, and IoT. Its strong customer base comes from Alibaba's e-commerce, logistics, and finance ecosystems. Tencent Cloud has a strong foothold in gaming, social media, and entertainment. It leverages the WeChat ecosystem for AI services like speech and image recognition and focuses its AI research on user behavior, ad optimization, and content recommendations.
Meanwhile, the risk of Chinese stocks being delisted from U.S. markets appears low for now. While national security concerns are occasionally raised, no immediate action has been initiated.
A Look at BIDU Stock Valuation
From a valuation standpoint, the company is currently trading at a discount relative to its industry and to historical metrics, with its forward 12-month price-to-earnings (P/S) ratio sitting below its five-year average. It currently has a Value Score of A.
This is a deep discount to the broader tech sector and even to Chinese peers. By comparison, Alibaba has a forward P/E of 11.1 and Tencent has 15.93.
Price/Earnings (F12M)
Zacks Investment Research
Image Source: Zacks Investment Research
BIDU’s Upward Estimate Revisions Signal Strength
Analysts are growing increasingly optimistic about Baidu’s earnings potential. Over the past 60 days, the Zacks Consensus Estimate for BIDU’s 2025 earnings per share has increased to $10.08 from $9.59, reflecting a positive shift in sentiment. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Zacks Investment Research
Image Source: Zacks Investment Research
How to Play BIDU Stock Now?
Baidu remains a compelling hold for long-term investors, supported by a strong innovation pipeline, robust financial footing, and undervalued stock price. Despite BIDU trading 25% below its 52-week high and showing bearish technical signals, its recent 7.8% gain over the past month outpaces both its industry and sector averages, reflecting budding investor confidence. The company’s AI-led transformation is gaining critical mass. From launching the high-performance ERNIE 4.5 Turbo and the logic-driven ERNIE X1 Turbo, to advancing pet communication AI and expanding its robotaxi service Apollo Go, Baidu is methodically scaling next-gen technologies that can unlock long-term revenue streams. Its generative AI revenue nearly tripled in 2024, and AI cloud growth of 26% year over year highlights surging enterprise demand.
While macro uncertainties like delisting fears and stiff competition from Alibaba and Tencent remain risks, the probability of near-term delisting appears low, and Baidu continues to benefit from a loyal user base, differentiated AI ecosystem, and expanding monetization avenues. Crucially, the stock trades at a significant valuation discount with a forward P/E below peers, supported by upward EPS revisions that reflect improved earnings visibility.
Given its discounted valuation, rising AI traction, and a stable financial base, holding BIDU offers investors a balanced risk-reward profile amid the evolving Chinese tech landscape. BIDU currently sports a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
