Baidu’s Growth Driven by AI Innovations and Strategic Partnerships
Zacks Rank #1 Stock (Strong Buy) Baidu (BIDU) is a Chinese-language internet search provider based in Beijing. Baidu holds the title of the largest internet search provider in China, offering services like maps, online communities, an encyclopedia, and a cloud-based storage service, similar to those provided by its American peer, Alphabet (GOOGL).
ERNIE Bot: China’s Leading AI Chatbot
While the United States continues to lead in artificial intelligence (AI), China is narrowing the gap, especially in terms of domestic market dominance. Baidu made significant strides by launching its AI chatbot, ERNIE, based on a large language model (LLM) in 2023. By March 2025, the platform gained 300 million users and integrated with Samsung’s Galaxy S24 operating system in China.
Partnership with Apple
Earlier this year, Apple (AAPL) announced a collaboration with Baidu to enhance AI search capabilities for image and text processing in its Chinese Siri, part of Apple’s “China Intelligence” initiative. The choice of Baidu, despite many potential partners, emphasizes its strength in the emerging AI landscape.
Apollo Go: Leading the Robotaxi Market
While the competition for robotaxi dominance in the U.S. centers on players like Tesla (TSLA) and Waymo, Baidu’s Apollo Go has already made substantial progress. It provided over 1.1 million rides in Q4 2023 and a cumulative total of more than 9 million rides. Furthermore, Baidu is in the process of expanding internationally, having secured permits in several Chinese cities as well as in places like Dubai, enhancing its global footprint in autonomous transportation.
Baidu Surpasses Earnings Expectations
Despite its successes in launching the ERNIE Bot and scaling its robotaxi service, Baidu has consistently exceeded Wall Street analysts’ earnings-per-share (EPS) projections. Last quarter, the company beat Zacks Consensus Estimates by 47.75%. Over the past four quarters, Baidu has averaged a 19.11% outperformance against analyst estimates.
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Valuation Analysis
Currently, Baidu’s valuation based on price-to-sales ratios is at one of the lowest points in its history, which may indicate potential for future growth.
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Technical Analysis
Recently, Baidu’s stock broke out of a bullish inverse head and shoulders pattern. Shares have also reclaimed their 200-day moving average, indicating a potential shift to a longer-term upward trend.
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Conclusion
Baidu’s strong advancements in AI technology, valuable partnerships like the one with Apple, and impressive expansion of its Apollo Go robotaxi service highlight its substantial growth potential.
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This article originally published on Zacks Investment Research (zacks.com).
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