Does A Kunlunxin AI Chip Spinoff Reshape The Bull Case For Baidu (BIDU)?

• Baidu recently considered a separate listing of its Kunlunxin AI chip unit, which has seen rapid sales growth and is aiming to compete more directly with leading global chipmakers like Nvidia.
• This move could spotlight Baidu’s in-house semiconductor capabilities as a distinct business, potentially clarifying how its AI infrastructure underpins cloud, search, and autonomous driving ambitions.
• We’ll now examine how the potential Kunlunxin spinoff, highlighting Baidu’s AI chip capabilities, might reshape the company’s broader investment narrative.

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Baidu Investment Narrative Recap

To own Baidu, you need to believe its heavy AI investments will eventually translate into stronger earnings from search, cloud, and autonomous driving, despite recent profit volatility. The potential Kunlunxin listing reinforces that Baidu is building more of its own AI infrastructure, but it does not materially change the near term catalyst or the biggest risk, which still center on whether Baidu can improve monetization and margins from its AI driven search and cloud offerings.

Among recent announcements, Baidu’s Q3 2025 results, with revenue of CNY 31,174 million and a net loss of CNY 11,232 million after a large one off charge, are most relevant here. They underline how capital intensive the AI transition has become and why investors are watching closely to see if assets like Kunlunxin can eventually support better profitability instead of prolonging margin pressure.

Yet investors should also weigh how rising AI and cloud costs could continue to pressure Baidu’s margins if...

Read the full narrative on Baidu (it's free!)

Baidu’s narrative projects CN¥150.8 billion revenue and CN¥22.3 billion earnings by 2028. This implies 4.0% yearly revenue growth, with earnings declining by CN¥3.1 billion from CN¥25.4 billion today.

Uncover how Baidu's forecasts yield a $151.99 fair value, a 23% upside to its current price.

Exploring Other Perspectives

Fourteen members of the Simply Wall St Community currently place Baidu’s fair value between US$71.17 and US$151.99, highlighting wide disagreement on upside. Against that backdrop, concerns about ongoing margin pressure from AI and cloud investments make it especially important to compare several different views on the company’s prospects.

Explore 14 other fair value estimates on Baidu - why the stock might be worth 43% less than the current price!

Build Your Own Baidu Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Baidu research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free Baidu research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Baidu's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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