Macquarie has released a research report following a series of non-deal roadshows for Baidu Group-SW (09888) in the United States and Canada.

During these events, investor focus centered on the company's comprehensive, full-stack AI strategy. Baidu's management reiterated its commitment to differentiation within China's internet sector by offering integrated solutions spanning semiconductors, cloud infrastructure, large language models, and applications.

The firm has maintained its earnings forecast for Baidu for the 2026 fiscal year. However, based on increased revenue projections for its Kunlun chip unit and comparable industry valuations, Macquarie has raised its target price for the Hong Kong-listed shares from HK$169 to HK$181.

Concurrently, the target price for Baidu's US-listed shares (BIDU) has been increased from $166 to $177. The "Outperform" rating remains unchanged.

Macquarie also highlighted that revenue for Baidu's Kunlun Chip (KLX) unit is projected to more than double year-over-year in FY2026, reaching approximately RMB 8.5 billion, with steadily expanding margins.

The firm assigns an estimated valuation of around $48 billion to KLX. With Baidu holding a 59% stake, this represents an equity value of approximately $82.5 per share, suggesting significant value could be unlocked through a potential public listing.

Currently, AI-related businesses contribute over half of the group's total revenue. Management has expressed strong confidence in the long-term value of its AI initiatives, anticipating that rapid growth in its infrastructure business will gradually offset pressures from the traditional search segment.