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In recent years, Chinese technology stocks have been overshadowed by the rise of generative artificial intelligence, though recent advancements have given 张百位acked attention. The DeepSeek AI model, introduced by China, offers comparable performance to ChatGPT but at a fraction of the cost, highlighting China’s robust AI capabilities. However, major tech companies like Alibaba and Tencent have seen significant growth, with their shares rising by more than 52% and 25% respectively. Baidu, as a leader in search engines, has achieved modest growth, accounting for roughly 6% of its stock rise. Despite this, Baidu’s advancements in AI, such as Ernie Bot and self-driving technology, could drive future growth, especially as the company becomes a prominent player in China’s AI sector.

Analyzing Baidu’s performance, the share has seen a 70% decline from its peak in 2021, primarily due to weaker-than-expected economic recovery, particularly the impact of COVID-19 on the housing market and household wealth. Unemployment rates also remained above government targets, exacerbating income stagnation. Hence, despite strong online advertising revenue, the share has struggled to recover. Despite these challenges, Baidu’s revenue growth and AI advancements have mitigated some risks and enhanced its position in the market.

The AI and cloud division of Baidu, with strong performance in Q4, helped mitigate core online advertising issues. Investments in AI technologies, including robo-taxis and generative AI, represent significant investments, yet the company is growing, particularly in Ernie AI API usage. The 1.65 billion daily API calls for Ernie indicate substantial daily usage, further boosting the company’s AI capabilities.

Notable, Baidu’s performance over the past four years is not impressive, with returns ranging from over -31% in 2021 to only a -29% in 2024. The Trefis High Quality Portfolio, which includes 30 large-cap Chinese stocks, outperforms the S&P 500. This is attributed to Baidu’s relatively lower volatility and superior performance, with a less turbulent ride compared to the benchmark.

These trends and performance of Baidu reflect broader economic conditions, including uncertain macroeconomic uncertainties such as low interest rates and geopolitical conflicts. However, despite past underperformance, Baidu is assessed fairly valueatively, trading below 9 times its 2025 earnings, which is among its reasonable valuations. Therefore, the stock’s valuation remains attractive, positioning Baidu for continued growth and profitability.

Investing with Trefis offers personalized investment strategies based on individual recognitions and trading rules.

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