A Look at Baidu’s (NasdaqGS:BIDU) Valuation Following Abu Dhabi Driverless Robotaxi Milestone

Baidu (NasdaqGS:BIDU) caught attention after Apollo Go, its autonomous ride-hailing arm, and AutoGo secured one of Abu Dhabi's first fully driverless commercial permits. The partners also agreed to expand their robotaxi fleet to hundreds of vehicles by 2026.

See our latest analysis for Baidu.

The Abu Dhabi expansion news came just as Baidu’s stock notched a 45% gain in the past 90 days and a year-to-date share price return of nearly 60%. This signals renewed momentum after a rocky few years. Recent moves highlight how optimism about the company’s autonomous driving leadership is fueling investor interest, even as the long-term total shareholder return over five years remains slightly negative.

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This surge in optimism raises a key question for investors: Is Baidu’s current valuation still leaving room for upside, or have recent gains already baked in expectations for future autonomous growth?

Most Popular Narrative: 6.1% Undervalued

Baidu's fair value estimate is $140.57, a modest premium to its last close of $131.95. This gap highlights why a new wave of analyst upgrades is catching investor attention.

Valuations have been updated to reflect higher contributions from cloud and AI divisions. These areas are seen as increasingly dominant relative to the lagging advertising business.

Read the complete narrative.

Curious about the math powering this new valuation? The narrative’s core assumptions exchange mature profit streams for substantial investments in emerging technology and anticipated future margin shifts. Discover which profit levers, revenue plays, and bold future multiples justify such a rating when you read the full story for the market-moving details.

Result: Fair Value of $140.57 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent advertising headwinds and the challenge of monetizing new AI-driven search could affect Baidu’s growth story if not resolved soon.

Find out about the key risks to this Baidu narrative.

Another View: What Does the SWS DCF Model Say?

Taking a different approach, our DCF model suggests Baidu could be trading above its calculated fair value, not below it. While the market may see upside in future tech bets, DCF takes a more cautious perspective. Does the real opportunity lie in analyst optimism or in present-day fundamentals?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Baidu for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 856 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Baidu Narrative

If you want to challenge these conclusions or uncover a different angle, our tools let you shape your own perspective with just a few clicks. Do it your way

A great starting point for your Baidu research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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