Baidu (BIDU): Evaluating Valuation as Kunlunxin AI Chip Subsidiary Eyes a Potential Separate Listing

Baidu (BIDU) shares are back in focus after reports that the company is weighing a separate listing for its Kunlunxin AI chip arm, a move that could unlock fresh value and sharpen its position against global chip rivals.

See our latest analysis for Baidu.

The Kunlunxin news lands as Baidu’s share price sits at $120.51 and rides a strong year to date share price return of about 45.7 percent. Even though the 1 year total shareholder return of roughly 40.8 percent still reflects a choppy few years where long term total shareholder returns remain modest and earlier enthusiasm has yet to fully recover, this suggests momentum is rebuilding but not yet euphoric.

If Baidu’s AI chip ambitions have your attention, it might be a good moment to see what else is shaping the space with high growth tech and AI stocks as potential ideas beyond the usual names.

Yet with revenue and earnings accelerating, but the stock still trading at a hefty discount to analyst targets and weighed down by a weak five year track record, is Baidu now undervalued or already pricing in its AI chip future?

Most Popular Narrative: 20.5% Undervalued

With Baidu closing at $120.51 versus a narrative fair value near $152, the valuation case leans on AI driven growth and higher future earnings multiples.

The commercialization and global expansion of Apollo Go (autonomous driving) through capital efficient, asset light partnerships with Uber, Lyft, and major international markets introduces high margin, recurring revenue streams. Successful execution could diversify income, support higher net margins, and unlock significant long term profit growth.

Read the complete narrative.

Want to see how steady top line growth, shifting margins, and a richer earnings multiple combine into that price tag? The narrative’s projections may surprise you.

Result: Fair Value of $152 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this upside hinges on Baidu proving it can effectively monetize AI search and avoid prolonged margin pressure from heavy AI and cloud investment.

Find out about the key risks to this Baidu narrative.

Another Take on Value

Step away from narratives and Baidu looks pricey on earnings. It trades on a 34.7x price to earnings ratio, richer than the US Interactive Media and Services industry at 16.3x and even above its 32.7x fair ratio, which hints at more downside risk if expectations reset.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Baidu Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a fresh narrative in minutes with Do it your way.

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.

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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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