"Morgan Stanley upgrades BIDU-SW rating, calling it 'China's most beneficial AI stock' with potential to rise another 31%"

Will BIDU-SW take off with the help of AI?

On Tuesday, Morgan Stanley rated BIDU-SW as the "best" AI company in China, believing that BIDU-SW will benefit the most from the process of AI tools helping China's 7.4 trillion-dollar consumer market shift from offline to online.

Morgan Stanley upgraded BIDU-SW's rating to "buy" and raised its target price by $30 to $190, saying that BIDU-SW will rise another 31% with the help of artificial intelligence.

Gary Yu, an analyst at Morgan Stanley, pointed out:

BIDU-SW is the "most obvious beneficiary" of the increase in China's AI applications. The company has deep expertise in areas such as autonomous driving and generative AI models, as well as proprietary search data.

The market has yet to give recognition to the AI innovation of Chinese internet platforms. BIDU-SW's Wenxin Yiyu tool has always been in high demand, with more than 200,000 people registered for it. It is expected that BIDU-SW will be one of the first companies to obtain a license for commercialization of AI-generated content.

In addition, Bank of America pointed out that BIDU-SW has a leading advantage in both technology and application:

We believe that BIDU-SW is in a favorable position to benefit from artificial intelligence because it is a leader in AI technology, a pioneer in China's AI large models and products, and its core businesses - search and cloud - will benefit greatly from the AI wave, which has been proven in overseas markets.

In terms of core technology, BIDU-SW has AI chip Kunlun, deep learning framework PaddlePaddle, model Wenxin Yiyu, and applications such as search, cloud services, autonomous driving, and smart devices.

In addition, BIDU-SW's unique search capabilities and huge search traffic, as well as a knowledge graph of over 550 billion facts, can assist large models in rapid iteration and upgrading.

Overnight, BIDU-SW's US stocks rose more than 4% against the trend during the trading session, while the Nasdaq Golden Dragon China Index (HXC) fell nearly 5%. However, BIDU-SW eventually closed down 1.10%.