Leveraging its full-stack AI capabilities spanning “Chip, Cloud, Model, and Application” built over a decade, Baidu (BIDU) is breaking through multiple scenarios across both C-end and B-end markets, becoming the first to complete the full loop from technology to commercialization. With AI business accounting for over half of its revenue, it has solidified its position as a stable fundamental pillar, while the scalable replication of its intelligent cloud, autonomous driving, and self-developed chip segments provides a clear path for medium- to long-term growth. As a result, the collective accumulation of shares by global top institutions and the shift in valuation methodology not only confirm its current commercialization achievements but also signal the market’s rediscovery of its true value.
On the evening of August 18, Baidu released its second-quarter 2026 financial results. Data shows that the company’s total quarterly revenue reached RMB 31.3 billion, of which AI business contributed RMB 12.5 billion, accounting for 50% of its general business revenue. This proportion has exceeded half for two consecutive quarters, marking a landmark collective shift in market perception of Baidu.
According to second-quarter 13F filings, Duquesne Family Office, led by legendary Wall Street investor Stanley Druckenmiller, built a new position in Chinese ADRs for the first time in two and a half years after liquidating its Alibaba holdings in the fourth quarter of 2023, and Baidu is the sole Chinese stock in its current portfolio. This move is not an isolated case: during the same period, Morgan Stanley established a new position of approximately 6.5 million Baidu ADRs; UBS Group increased its holdings by 917,700 ADRs, a quarter-over-quarter increase of 43%; and Bank of America raised its position by 1.087 million ADRs, a quarter-over-quarter surge of 305%. In the hedge fund space, Appaloosa Management, led by David Tepper, bucked the overall trend of reducing Chinese internet assets in the second quarter and instead increased its Baidu position by over 600,000 ADRs, an 87% quarter-over-quarter increase.
From the return of legendary investors to the synchronized accumulation by multiple leading global banks, this multi-dimensional, cross-strategy institutional resonance clearly sends a signal: Baidu’s investment value in the AI sector is gaining collective recognition from top global asset managers. The underlying logic is that Baidu’s AI business has entered a strong delivery phase of scalable replication, and AI has become the company’s de facto revenue backbone. This marks that Baidu’s full-stack “Chip, Cloud, Model, and Application” layout, established over a decade, has achieved accelerated delivery of scaled commercialization.
As AI business revenue surpasses the 50% critical threshold, the market’s pricing logic for Baidu is shifting from traditional P/E valuation to SOTP (sum-of-the-parts) valuation. Recently, nearly ten top investment banks, including J.P. Morgan, UBS, and CICC, have explicitly adopted sum-of-the-parts valuation for Baidu. J.P. Morgan further pointed out that the standalone valuation of its AI business alone reaches USD 169 per ADS, and believes Baidu’s reasonable value should be USD 230 per ADS. In addition, Baidu is actively advancing the dual primary listing conversion of its Hong Kong shares and preparing for inclusion in the Southbound Stock Connect, while Kunlunxin’s Hong Kong IPO is also in progress, with public market information indicating a valuation range of USD 51 billion to 63.8 billion. These catalysts are expected to accelerate the return of Baidu’s true value, offering an extremely attractive entry window for long-term capital.
