Baidu (NasdaqGS:BIDU) Valuation in Focus as Apollo Go Secures Dubai Autonomous Taxi Trial and Eyes Global Expansion

If you’ve been following Baidu (NasdaqGS:BIDU), the latest buzz out of Dubai is hard to ignore. The company just became the first to receive an autonomous driving trial permit and 50 test licenses from Dubai’s Roads and Transport Authority, allowing its Apollo Go fleet to start open-road ride-hailing trials. This landmark achievement marks Baidu as the only platform currently authorized for such activity in urban Dubai, putting it on the global stage as a pioneer in driverless technology. For investors, this represents more than just another product launch. It signals a level of market validation and execution that could have far-reaching implications.

Looking at the bigger picture, Baidu’s push into Dubai caps off a year of momentum shifts for the stock. While the company’s robotaxi business is already moving toward profitability in China, ongoing expansion talks in Australia, Europe, and Southeast Asia fuel a narrative of ambitious growth. Over the past month, Baidu’s stock rallied nearly 46% and is up 25% for the year, even as recent earnings forecasts predict a temporary dip in revenue and net income. The mix of strong AI partnerships and these autonomous vehicle milestones has clearly stirred renewed optimism among investors, despite flashes of volatility along the way.

With Apollo Go’s Dubai debut and a range of expansion targets ahead, the question remains: is Baidu trading at a discount to its true future potential or is the market already pricing in this next phase of global growth?

Most Popular Narrative: 11.6% Overvalued

The most widely followed narrative now sees Baidu as overvalued by 11.6%, a shift shaped by recent analyst price target increases and optimism around AI progress, even as near-term revenue pressure persists.

The Kunlun chip initiative, particularly its GPU rental business, is expected to drive enterprise cloud segment growth and offset the ongoing weakness in the online advertising business.

Notable customer wins, such as a deal with China Mobile for Kunlun-powered chips, are seen as material contributors to future valuation.

What is the secret formula boosting Baidu’s perceived value? There is bold thinking behind soaring profit multiples and a valuation jump that leaves many investors guessing. Which key assumptions are moving the price target up, such as revenues, margins, or future AI deals? Discover the underlying financial forecasts and surprising numbers that set today’s fair value.

Result: Fair Value of $117.66 (OVERVALUED)

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

However, ongoing delays in monetizing AI search and increased competition in China’s cloud sector could quickly undermine Baidu’s bullish outlook.

Find out about the key risks to this Baidu narrative.

Another View: Discounted Cash Flow Model Offers a Different Take

While market multiples suggest that Baidu is richly valued, a look through our DCF model presents a very different perspective. This approach indicates the shares might be undervalued and challenges conventional wisdom. Which method best reflects the real opportunity?

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

Stay updated when valuation signals shift by adding Baidu to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Baidu Narrative

If you see things differently or prefer digging into the numbers yourself, you can shape your own Baidu narrative in under three minutes using 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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