DBS Group Research has upgraded Baidu to a buy rating, pointing to strong prospects for its autonomous driving and cloud businesses as the Chinese tech company accelerates expansion overseas.
The brokerage raised its American depositary receipts target to US$177 from US$85 and its Hong Kong-listed shares target to HK$175 from HK$84.
Analysts expect Baidu’s robotaxi unit to expand rapidly, noting that operations in Wuhan have reached operating breakeven on a per-vehicle basis.
They forecast Baidu’s cloud revenue to grow by 27% in 2025 and 20% in 2026, driven by rising demand for artificial intelligence services.
Robotaxi business scales up in China and overseas
Baidu operates more than 1,000 robotaxis globally under its Apollo Go brand, and the company claims that each vehicle is profitable in Wuhan.
Having reached that milestone, it is now looking to replicate its success overseas.
The Middle East has emerged as a preferred destination for Chinese autonomous vehicle operators, supported by local governments eager to attract advanced transport technologies.
Baidu has partnered with Autogo in Abu Dhabi and began trials of its 50-car fleet in Dubai in August, after receiving the city’s first autonomous driving test licenses in July.
The company aims to expand its Dubai fleet to over 1,000 vehicles by 2028.
Apollo Go also secured Hong Kong’s first autonomous driving test license in November and is exploring opportunities in Australia and Southeast Asia, Bloomberg reported on Friday.
Baidu has further partnered with Lyft to launch operations in Europe, beginning with the UK and Germany next year.
Cloud growth and advertising revamp
Alongside autonomous driving, DBS expects Baidu’s cloud business to remain a major growth driver, fueled by AI adoption.
The company is benefiting from demand for its AI capabilities as China’s technology ecosystem builds large language models that require significant computing power.
Baidu’s advertising business, once its main profit engine, has been under pressure.
However, analysts see signs of stabilization by the fourth quarter as the company implements an AI-driven revamp of its ad technology.
Shares rally on AI optimism
Baidu’s shares have staged a sharp rally this year, reflecting investor optimism over its progress in AI.
Its Hong Kong-listed stock has gained nearly 60% so far in 2025, including about 45% in the past month.
In New York, its ADRs have risen more than 61% this year and 47% in the past month.
The recent rally has also been supported by investor enthusiasm for Baidu’s chip business.
Analysts at Nomura said the unit is likely to benefit from rising demand for inference chips among Chinese AI developers, alongside peers such as Alibaba’s semiconductor arm.
Nomura, however, cautioned that ongoing weakness in the advertising business could weigh on overall performance.
The brokerage maintained a neutral rating while raising its ADR target price to US$135 from US$91.
Baidu has invested heavily in autonomous driving since 2013 and continues to bet on AI as a long-term growth driver, with its dual focus on robotaxis and cloud computing expected to underpin its strategy.
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