What's Going On With Baidu Stock Tuesday

Baidu, Inc BIDU stock is trading higher Tuesday after Morgan Stanley analyst Gary Yu upgraded the stock from Equal-Weight to Overweight and raised the price target from $160 to $190.

The company is the best proxy to own as artificial intelligence tools help China shift $7.4 trillion in spending from offline to the internet, Bloomberg cites the analysts.

Also Read: Chinese Vendors Bypass US Embargo to Supply High-end Nvidia A100 AI Chips: Report Reveals Hidden Market Dynamics

According to analysts, Baidu is "the most obvious beneficiary" of increasing AI adoption in China. 

The re-rating reflected the firm's extensive know-how in autonomous driving, generative AI models, and proprietary search data.

According to analysts, the market has yet to give credit to Chinese internet platforms for AI innovations – even with the launch of ChatGPT-like products.

Yu said that demand for Baidu's Ernie bot, Baidu's ChatGPT counterpart, has been robust, with over 200,000 already signing up for the tool. He expects Baidu to be within the first group of companies receiving licenses to commercialize AI-generated content. 

The analysts do not see Baidu facing the issues of an AI chip crisis due to the U.S. embargo as it has built up its chip inventory before export curbs kicked in.

Price Action: BIDU shares traded higher by 0.89% at $146.42 on the last check Tuesday.