Baidu is becoming a key player in China's AI chip market to address the Nvidia shortfall.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 28 2025
0mins
Should l Buy BIDU?
Source: CNBC
Baidu's Position in AI Chips: Baidu is emerging as a significant player in China's AI chip market, positioning itself as a competitor to Huawei and filling the gap left by Nvidia's absence in the country.
Growth and Demand for Kunlun Chips: Analysts predict explosive growth for Baidu's Kunlun chip unit, with sales expected to increase six-fold by 2026, driven by strong domestic demand for AI computing.
Challenges in Semiconductor Supply: Chinese tech companies, including Baidu, face supply shortages of chips due to global demand and restrictions on Nvidia products, prompting them to seek local solutions and improve efficiency.
Strategic Opportunity for Baidu: Baidu's push into chip manufacturing is seen as both a necessity due to the lack of US GPUs and an opportunity to become a key supplier in China's AI hardware market, aligning with Beijing's self-reliance goals.
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Analyst Views on BIDU
Wall Street analysts forecast BIDU stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BIDU is 160.67 USD with a low forecast of 100.00 USD and a high forecast of 215.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Analyst Rating
11 Buy
2 Hold
0 Sell
Strong Buy
Current: 138.960
Low
100.00
Averages
160.67
High
215.00
Current: 138.960
Low
100.00
Averages
160.67
High
215.00
About BIDU
Baidu Inc is a Chinese language Internet search provider. The Company operates its businesses through two segments, Baidu Core segment and iQIYI segment. Baidu Core segment mainly provides search-based, feed-based, and other online marketing services, as well as products and services from the Company’s new artificial intelligence (AI) initiatives, such as display advertisement and based on performance criteria other than cost-per-click, cloud services, smart devices and services, non-marketing consumer-facing services such as membership, and intelligent driving. iQIYI segment produces, aggregates and distributes a wide variety of professionally produced content, as well as a broad spectrum of other video content, in a variety of formats, including a variety of products and services encompassing online video, online games, online literature, comics and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Humanoid Robot Production: Over 50 companies are developing humanoid robot platforms, with shipments expected to grow from tens of thousands today to millions annually over the next decade, driven by labor shortages and falling component costs, which will transform operations in manufacturing and logistics.
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- Share Buyback Program: Baidu's board has authorized a $5 billion share repurchase program effective until December 31, 2028, aimed at enhancing shareholder value and boosting market confidence.
- First Dividend Policy: The board has approved a dividend policy for ordinary shares for the first time, with the first dividend payment expected in 2026, indicating a commitment to shareholder returns.
- Cash Flow Pressure: Despite holding $41.64 billion in cash and equivalents as of September 30, 2025, Baidu reported a concerning $302 million outflow in free cash flow, primarily due to heavy investments in AI, highlighting financial strain.
- AI Investment and Layoffs: Baidu's ongoing investments in AI have led to over 200 million monthly active users, but the company has also downsized its workforce by up to 40% in some departments, reflecting the challenges of balancing innovation with cost control.
See More
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- Share Buyback Initiated: Baidu has approved a $5 billion share repurchase program effective through December 31, 2028, aimed at enhancing shareholder value and boosting market confidence.
- Dividend Policy Adopted: The company also approved a dividend policy for its ordinary shares, which may include regular and/or special distributions, reflecting a commitment to shareholder returns and attracting investor interest.
- Strong Market Performance: With a current market cap of $49 billion, Baidu's Q3 results exceeded market estimates, indicating robust growth in a competitive landscape.
- Positive Future Outlook: The company is expected to release its Q4 earnings on February 26, with the market generally optimistic about its future performance, particularly in the areas of AI and autonomous driving innovations.
See More
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- Share Buyback Program: The company's board approved a stock repurchase program of up to $5 billion, set to run through December 2026, aimed at enhancing shareholder value by reducing the number of shares outstanding, thereby increasing earnings per share.
- Positive Market Reaction: Following the announcement of the dividend and buyback plan, Baidu's shares jumped nearly 5% in after-hours trading, indicating a positive market response to the company's new strategy, despite the overall bearish sentiment.
- Peer Comparison: In contrast to Baidu's buyback initiative, Alibaba approved a $25 billion repurchase program in 2024, while Tencent rolled out a $10 billion buyback plan last year, highlighting the increasing emphasis on capital returns within the industry.
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