Cathie Wood is not known for sitting on the sidelines. The ARK Invest founder has a long history of making bold bets on disruptive technology, and her latest move is turning heads.
Last week, Wood added more than $12 million worth of Baidu (BIDU) stock across ARK Invest's exchange-traded funds. It's a notable call at a time when the competition between artificial intelligence in the U.S. and China is heating up.
So what does Wood see in Baidu that others might be missing?
Baidu Is No Longer Just a Search Engine
Most Americans know Baidu as China's version of Google (GOOGL) (GOOG). But the company has quietly transformed itself into one of China's most comprehensive AI platforms, and its latest earnings results back that up.
In the fourth quarter of 2025, Baidu's core AI-powered business generated more than RMB 11 billion ($1.6 billion) in revenue, equal to 43% of total Baidu General Business revenue. That share has been climbing steadily over recent quarters.
The company operates across several high-growth AI verticals:
- AI Cloud Infrastructure: Revenue hit roughly RMB 20 billion ($2.9 billion) for the full year 2025, up 34% year-over-year (YoY). Subscription-based revenue from AI accelerator infrastructure surged 143% YoY in Q4 alone.
- Autonomous Ride-Hailing (Apollo Go): Baidu delivered over 10 million fully driverless rides in 2025. Cumulative rides to the public have now crossed 20 million. The service has expanded to 26 cities worldwide, including Abu Dhabi, Dubai, London, and Seoul.
- AI Applications: Full-year 2025 revenue from AI applications exceeded RMB 10 billion ($1.45 billion). ERNIE Assistant, Baidu's AI chatbot, surpassed 200 million monthly active users in December.
- AI-Native Marketing (Digital Humans and Agents): Revenue from this segment grew 110% YoY in 2025.
"AI is now firmly integrated across our portfolio," Baidu co-founder and CEO Robin Li said on the earnings call.
Wood's Baidu buy wasn't an isolated move. Across ARK's funds last week, the firm made a sweeping rotation toward AI infrastructure, autonomous technology, and AI-driven applications, while trimming legacy holdings.
Baidu is a company at the intersection of AI, cloud computing, autonomous driving, and consumer AI applications, all key segments where ARK is concentrating capital.
What Makes Baidu Stand Out in the AI Race
Baidu has a few things working in its favor that are easy to overlook:
- First, the company has been building its own AI chips through a subsidiary, Kunlunxin, for over a decade. In Q4, Baidu announced a proposed spin-off and separate listing of Kunlunxin, a move the company says will unlock significant value. Kunlunxin chips are already deployed at scale across financial services, telecom, energy, and internet companies in China.
- Second, Apollo Go's unit economics are improving. Baidu said it became the first robotaxi company to achieve unit economics (UE) breakeven in Wuhan in late 2024. Management expects more cities to hit that milestone in 2026, a sign the business model is starting to work.
- Third, Baidu's AI search transformation is scaling. Call volume for its AI search API grew by more than 110% quarter-over-quarter in Q4, with the company now adding multilingual capabilities for international markets.
"We believe our core AI-powered business will become the majority of Baidu General Business in the foreseeable future," Li said.
The Bottom Line on BIDU Stock
Analysts tracking BIDU stock forecast revenue to increase from $18.9 billion in 2025 to $24.4 billion in 2029. In this period, adjusted earnings per share are forecast to expand from $7.81 to $18. If BIDU stock is priced at 14x forward earnings, which is below its 10-year average of 19x, it should gain more than double over the next three years.
Out of the 20 analysts covering Baidu stock, 15 recommend “Strong Buy,” one recommends “Moderate Buy,” and four recommend “Hold.” The average BIDU stock price target is $169.46, above the current price of about $117.
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
