BIDU
The market’s still pricing Baidu like it’s 2018
Baidu has a classic Wall Street problem: the market keeps squinting at the search business while a very different company quietly grows in the background. This piece argues that the stock’s roughly 6x EV/EBITDA multiple is missing the biggest thing in the room — its AI chip operation, Kunlunxin.
The spinoff that could make the math awkward
Kunlunxin has reportedly filed confidentially for a Hong Kong listing, which means the market may soon have to put an actual price tag on a business that some models currently treat like it’s invisible. That matters because outside estimates peg the subsidiary’s standalone value in the $16 billion to $23 billion range, with Baidu’s stake potentially worth $9 billion to $13 billion.
If you’re an investor, that’s the kind of hidden-asset story that can turn a “cheap” stock into a “wait, how cheap is this really?” stock.
The bigger tell: AI may become the main act
There’s another catalyst lurking in Q1 earnings on May 18. Bank of America reportedly expects AI-powered revenue to cross 51% of Baidu’s total mix in the quarter, which would be a pretty wild line in the sand for a company long thought of as China’s search-ad machine.
That’s the real narrative shift here:
- legacy ads stop being the main story
- AI infrastructure becomes the headline business
- the valuation conversation changes from “internet leftovers” to “vertical AI stack”
Why investors should care
This isn’t about Baidu suddenly becoming a meme stock. It’s about the possibility that the market has been using the wrong yardstick. If Kunlunxin gets its own public valuation and AI revenue crosses the majority mark, the company may no longer deserve to trade like a blended legacy tech name.
Big picture: sometimes the stock doesn’t need a miracle — it just needs investors to count the stuff already on the balance sheet.