BIDU(US:BIDU) Ge Long Hui·2025-11-24 09:11Core Viewpoint - Baidu's stock has seen a pre-market increase of approximately 3.4%, reaching $114.69, while its H-shares rose about 4.2% to HKD 111.8, following an upgrade from Morgan Stanley, which raised its investment rating from "Neutral" to "Overweight" [1] Group 1: Investment Rating and Price Target - Morgan Stanley upgraded Baidu's investment rating to "Overweight" and increased the target price for its H-shares from HKD 105 to HKD 185 [1] - The target price for Baidu's U.S. shares was also raised from $110 to $188 [1] Group 2: Growth Drivers - The report highlights that market focus is shifting towards Baidu's cloud and AI businesses, which are expected to become the main growth engines and value drivers [1] - Baidu's cloud revenue growth is projected to accelerate to approximately 61% by 2026, compared to an estimated 23% for this year [1] - Sales of Kunlun chips are forecasted to increase sixfold to CNY 8.3 billion by 2026 [1] Group 3: Valuation and Market Perception - Morgan Stanley estimates the valuation of Baidu's cloud business to be around $34 billion, suggesting that the market may be underestimating its transformation potential [1] - The firm recommends investors to enter the market now to capture the opportunity for valuation re-rating [1]