DBS Keeps Hold Rating on Baidu, Inc. Class A, Sets Price Target of HK$84.00

DBS analyst Sachin Mittal maintains a Hold rating on Baidu, Inc. Class A with a price target of HK$84.00. Baidu's AI and robotaxi expansion drive a Buy rating from some analysts, despite a current market cap of HK$248.4B and P/E ratio of 8.71.

Baidu (NASDAQ: BIDU), a leading player in the AI and autonomous vehicle (AV) sector, has recently partnered with Uber to deploy thousands of its AVs globally. This strategic move is a significant step toward unlocking Baidu's full potential in AI-driven mobility and positions the stock as a compelling value play in the high-growth, high-multiple sector.

The partnership combines Baidu's technological leadership with Uber's global reach, addressing key challenges for both companies. Baidu's Apollo platform, which powers over 1,000 fully driverless vehicles globally and has completed 11 million rides as of May 2025, is a testament to its technical prowess [1]. The partnership aims to integrate Baidu's AVs into Uber's network, initially in markets like Dubai and Abu Dhabi, then expanding to Europe and beyond.

The collaboration offers strategic synergies, with Baidu's hardware-software integration complementing Uber's regulatory and distribution expertise. Baidu's vertically integrated model, from LiDAR sensors to cloud computing, ensures robust AV performance, while Uber's global footprint accelerates market penetration. For Uber, the deal addresses two critical challenges: boosting ride supply in underserved areas and future-proofing its platform against driver shortages.

The financial implications of the partnership are compelling. Autonomous rides eliminate driver costs, potentially improving Uber's margins. For Baidu, the partnership provides a revenue stream from per-ride fees and data insights, while scaling its autonomous ecosystem. Initial trials in the U.K. will start with safety operators, but full driverless deployment by 2026 could trigger a revaluation of Baidu's stock.

The global autonomous mobility market is projected to reach $2.7 trillion by 2030, with Asia and the Middle East leading adoption. Baidu's early presence in these regions, coupled with Uber's brand recognition, positions it to capture significant market share. By 2030, Baidu aims to operate in 15 European cities, a target bolstered by Uber's local partnerships.

Risks remain, including technical hurdles, regulatory delays, and competition from companies like Tesla and GM Cruise. However, Baidu's head start in autonomous testing and its cost-effective AV designs give it an edge in emerging markets where price sensitivity is high.

Baidu's current valuation reflects investor skepticism about its ability to monetize AI. At a P/E of ~8.71, it trades at a 50% discount to its sector average (16.6x) and a 54% discount to its own five-year average (21.0x). Analyst estimates suggest a 12-month price target of $104.85—22% above current levels—though wide dispersion in targets highlights uncertainty.

DBS analyst Sachin Mittal maintains a Hold rating on Baidu, Inc. Class A with a price target of HK$84.00, while some analysts have driven a Buy rating due to Baidu's AI and robotaxi expansion [2]. Despite a current market cap of HK$248.4B and P/E ratio of 8.71, the Uber partnership could narrow the valuation gap and offer a clear path to revenue growth and margin expansion.

References:
[1] https://www.ainvest.com/news/baidu-autonomous-vehicle-partnership-uber-catalyst-global-dominance-ai-driven-mobility-2507/
[2] https://www.dbs.com/