Baidu (NasdaqGS:BIDU) has just kicked off autonomous vehicle testing in Dubai, following the company’s receipt of the city’s very first self-driving trial permit and 50 test licenses. Apollo Go is now the only platform authorized to run urban road trials in Dubai, serving as an early indicator of expanding international ambitions.
See our latest analysis for Baidu.
Baidu’s leadership in autonomous mobility has dovetailed with a period of revived investor optimism, helped by the company’s exclusive Dubai license and other recent moves, including the co-launch of a biotech spin-off and listing plans for its Robotaxi business. Despite turbulent quarters, the stock’s momentum is building. Strong periods for the share price have attracted marquee investors, and its 1-year total shareholder return, while muted at just 0.28%, reflects potential for longer-term growth as global projects begin to deliver results.
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With shares riding a powerful rally and future earnings facing downward revisions, the key question for investors is whether Baidu remains undervalued after its global expansion news, or if the market has already priced in much of its growth story.
Baidu’s current fair value in the most followed narrative is $117.66, but the stock’s last close at $140.23 puts it above this estimate. With the analyst view seeing the price running hotter than the fundamentals, there is a clear debate on whether recent global expansion and AI momentum are fully reflected, or perhaps overhyped, in today’s valuation.
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.
Think Baidu’s fair value is all about its global robotaxi ambitions? Wait until you see the bold growth and profit projections woven into this narrative. The next move in valuation depends on assumptions you just might not expect. See the forecast that is driving analyst conviction.
Result: Fair Value of $117.66 (OVERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, ongoing challenges in monetizing AI search and the risk of prolonged margin pressure could undermine confidence in Baidu’s longer-term growth outlook.