Bernstein analysts upgraded Baidu (NASDAQ:BIDU) shares to Outperform from Market Perform with the price target of $160 per share, up from the prior $109.
The analysts believe generative AI innovations could give the company’s strategy “a new lease on life.”
“We believe the root cause of Baidu's multi-year underperformance lies in its low growth efficiency from a poorly constructed portfolio of initiatives. GPT can accelerate development of its business and give the company the tailwinds to reshape its strategy. We expect to see reduced model development time to create a virtuous cycle of accelerating development of many of its businesses and creating new revenue opportunity faster,” they said in an upgrade note.
Along these lines, the analysts see the product roadmap catalysts over the next 12 months as an opportunity to “drive value recognition.”
“A day in GPT is a year. Baidu mgmt seem to have learnt from mistakes and able to "test and learn, fail fast and move on". This gives a packed product development roadmap with multiple catalysts for value recognition. Within next 12 months we can expect: Search multiple product launches, AI Cloud PAAS new products, GPT ecosystem build out,” they added.
Baidu shares are down almost 1% in pre-market Tuesday.