BIDU(US:BIDU) Goldman Sachs·2025-07-16 15:25Investment Rating - The investment rating for Baidu.com Inc. (BIDU) is "Buy" with a 12-month price target of $96.00, indicating an upside potential of 11.8% from the current price of $85.87 [10][18][22]. Core Insights - Baidu's partnership with Uber marks a significant step in the global expansion of its Apollo Go autonomous vehicle service, with initial rollouts planned for Asia and the Middle East later this year [1][3]. - The Apollo Go service currently operates in 15 cities, including Dubai and Abu Dhabi, with a fleet of 1,000 fully driverless cars and over 11 million completed rides [2][3]. - The valuation of Baidu's Robotaxi business is estimated at $3.9 billion, with expectations for rapid fleet expansion over the next 1-2 years as commercial operations increase [5][10]. Summary by Sections Global Expansion - Baidu is committed to expanding its autonomous vehicle service internationally, with recent expansions into Hong Kong, Singapore, and the Middle East, and plans to enter Europe by the end of the year [4][3]. - The user experience, safety, and adaptability of Robotaxi services to different regulatory environments are critical factors for successful overseas expansion [4]. Financial Projections - Revenue projections for the Apollo Self-Driving segment show significant growth, with expected gross transaction values increasing from RMB 161 million in 2024 to RMB 3.080 billion by 2027, reflecting a year-on-year growth rate of 350% in 2024 [9]. - The number of trips is projected to rise from 6.6 million in 2024 to 136.9 million by 2027, with the fleet size expected to grow from 1,000 vehicles to 15,000 during the same period [9]. Valuation Metrics - The valuation analysis indicates a strong upside risk if Baidu successfully accelerates its global market expansion, with a focus on improving unit economics in favorable pricing areas [5][10]. - The SOTP (Sum of the Parts) valuation reflects a significant contribution from the Robotaxi segment, which is projected to enhance Baidu's overall market valuation [10].