Baidu’s shares surged nearly 16% in Hong Kong on Wednesday, hitting a two-year high, as investors responded to a series of AI-related developments and a fresh analyst upgrade.
The Beijing-based tech company, best known for its search engine dominance in China, also saw an 8% increase in its U.S.-listed shares overnight.
Analyst Upgrade Highlights AI Potential
Equity research firm Arete Research Services upgraded Baidu’s American depositary receipts from “sell” to “buy,” citing optimism about the company’s AI chip and cloud-computing business.
Baidu is betting big on AI, especially through its large language model and chatbot, Ernie Bot. The company has begun using its own chips to train these models, according to a report from The Information.
Arete believes Baidu’s chip efforts could help offset weakness in its core online advertising business, which has been under pressure this year.
AI Deals And New Bond Offering
Earlier this week, Baidu signed an AI partnership with China Merchants Group, a state-owned firm involved in sectors like transport, finance, and real estate. The two companies plan to collaborate on large language models, AI agents, and digital employees.
On Tuesday, Baidu announced a 4.4 billion yuan ($56.2 million) offshore bond offering. This follows a $2 billion bond issue in March. The new funding is expected to support its ongoing AI development.
Other Chinese tech companies like Tencent have also raised capital this year to expand their AI capabilities.
New AI Model Unveiled
At a recent developer conference, Baidu launched its newest AI reasoning model, Ernie X 1.1. The company claimed it outperformed a competing model from Chinese startup DeepSeek on several benchmarks, although CNBC could not independently verify this.
Shifting Strategy Toward AI
Despite a drop in second-quarter revenue, Baidu’s stock has gained nearly 59% in Hong Kong this year.
Gimme Credit analyst Saurav Sen said the company’s recent capital decisions reflect an “all-in AI pivot.”
By reducing its reliance on U.S. chipmakers like Nvidia, Baidu is positioning itself for long-term independence in a fast-changing AI landscape.
