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Baidu (BIDU) Gets Big Upgrade from JPMorgan: AI Chips and Cloud Now Driving the Story

Baidu, Inc. (NASDAQ:BIDU) is one of the Hot AI Stocks to Keep on Your Radar. On November 24, JP Morgan upgraded the stock to “Overweight” from Neutral and raised its price target to $188.0 from $110.0. The firm is optimistic on BIDU, noting how AI and cloud are changing the narrative and becoming primary growth engines and value drivers for BIDU.

According to analyst Alex Yao, market is currently underestimating the transition and that investors should buy into the stock now to capture the valuation rerating. Moreover, he noted that Baidu’s cloud revenue growth may accelerate to around 61% in 2026, as compared to 23% in 2025. This acceleration is driven by a surge in sales of Kunlun AI chips.

” With our estimates showing Baidu’s cloud revenue growth accelerating to ~61% in 2026 (vs. ~23% in 2025) thanks to a 6x surge in Kunlun chip sales, and a SOTP valuation framework attributing ~$34B to cloud (~53% of our target price), we believe the market is underestimating this transformation.”

The analyst further noted how domestic demand for AI compute in China remains intense and that hyperscalers are sourcing from local providers even more. That said, it believes that the Kunlun AI chips is best positioned and anticipates chip sales to increase six-fold.

“In addition, we expect GPU compute revenue to maintain triple-digit growth given enterprise mania for model training, fine-tuning and inference. With such infrastructure momentum, we expect Baidu cloud revenue growth of ~61% in 2026, accelerating from ~23% in 2025. This fundamental shift supports our move to a dedicated SOTP valuation. We value Baidu cloud at ~$34B or ~$100 per share, based on 6x 2026E revenue for cloud ex-Kunlun chip sales and 15x 2026E revenue for Kunlun chip.”

Baidu, Inc. (NASDAQ:BIDU) is a Chinese internet giant and AI pioneer, known for its noteworthy investments in artificial intelligence technology and its position as the dominant search engine within the country.

While we acknowledge the risk and potential of BIDU as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BIDU and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 10 AI Stocks in Focus on Wall Street and 10 Hot AI Stocks to Keep on Your Radar

Disclosure: None.

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When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

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  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
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