Baidu stock is down 25% from 52-week high but offers long-term growth potential

From Nasdaq: 2025-05-08 12:03:00

Baidu, Inc. (BIDU) shares have risen by 7.8% in the past month, outperforming the industry and sector averages. Despite this increase, the stock remains 25.4% below its 52-week high. BIDU is up by only 3% year to date, facing challenges amidst the threat of delisting Chinese stocks from U.S. markets.

Baidu has filed a patent for an AI-powered system to translate animal vocalizations into human language, enhancing emotional understanding between animals and humans. The company unveiled its latest AI model, ERNIE 4.5 Turbo, offering advanced capabilities at a reduced cost, positioning it well in the AI market.

Baidu’s Apollo Go robotaxi service provided over 1.1 million rides in Q4 2024, showing a 36% year-over-year increase. The company is expanding its driverless operations and pursuing partnerships for fleet growth. Baidu’s AI Cloud revenue surged 26% year over year, driven by strong demand for AI infrastructure among enterprises.

Baidu closed 2024 with a solid financial foundation, including a net cash position of RMB 170.5 billion. The company repurchased over $1 billion of shares in 2024, demonstrating confidence in its long-term prospects. Despite facing headwinds in its core business and competition in AI and cloud services, Baidu remains well-positioned for growth.

Analysts are increasingly optimistic about Baidu’s earnings potential, with estimates for 2025 EPS on the rise. The stock, currently trading at a discount, offers a balanced risk-reward profile amidst evolving Chinese tech dynamics. BIDU presents a compelling long-term investment opportunity supported by innovation and undervaluation.



Read more at Nasdaq: Baidu Stock Trades 25% Below 52-Week High: Should You Buy the Dip?