Zacks Rank #1 stock (Strong Buy) Baidu (BIDU) is a Chinese-language internet search provider based in Beijing. Baidu is the largest internet search provider in China. Like its American counterpart, Alphabet (GOOGL), Baidu offers a plethora of services beyond traditional search, including maps, online communities, an encyclopedia, and a cloud-based storage service.

ERNIE Bot: The AI Leader in China
Though the United States still leads the AI race (albeit by a small margin), China is closing the gap. In addition, Baidu and other Chinese tech companies do not have to worry about foreign competition.

Baidu introduced its AI chatbot through the ERNIE large language model (LLM) in 2023. Since then, the ERNIE platform has reached 300 million users during March 2025 while integrating with Samsung’s Galaxy S24 operating system in China.

Baidu Scores Apple Partnership
Earlier this year, Apple (AAPL) announced that it would be working with Baidu to work on AI search features for image and text processing, for its Chinese Siri as part of Apple’s “China Intelligence” initiative. Considering that Apple likely consulted with many Chinese companies, yet chose Baidu, is telling.

Apollo Go: The Largest Fleet of Robotaxis Worldwide
While many investors focus on the battle for robotaxi supremacy stateside between Tesla (TSLA) and Google’s Waymo, they are still very much in their infancy, with Waymo operating a small fleet in a handful of US cities and Tesla set to launch this summer in Austin.

Conversely, Baidu’s “Apollo Go” has already achieved significant success in China and is in the process of expanding globally. Apollo Go provided more than 1.1 million rides in Q4 and a total of more than 9 million since inception. Baidu has attained permits in several Chinese cities and is expanding to countries like Dubai. As Baidu scales Apollo Go, it will be able to provide safer rides with its massive autonomous driving track record and reduce costs.

Baidu Beats Expectations
Despite the successful launch of the “Ernie Bot” and Baidu’s rapidly growing autonomous taxi fleet, Wall Street analysts have been underestimating Baidu’s EPS potential recently by a wide margin.

Last quarter, BIDU beat Zacks Consensus Estimates by a healthy 47.75%. Meanwhile, BIDU has beat analyst estimates by an average of 19.11% over the past four quarters.

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Valuation Lowest in History
From a price-to-sales perspective, Baidu’s valuation is nearly the lowest it has been since inception.

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Technical View
BIDU recently broke out of a bullish inverse head and shoulders pattern. Meanwhile, shares have recaptured the 200-day moving average, signaling a long-term trend change.

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Bottom Line

Baidu’s advancements in AI, strategic partnerships like the one with Apple, and the impressive growth of its Apollo Go robotaxi service, highlight its strong growth potential.

— Andrew Rocco

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