Why Baidu Stock Zoomed 11% Higher Today

Chinese internet search king Baidu (BIDU 11.25%) was looking very regal on Wednesday, at least as far as its U.S.-listed equity was concerned. The company's American depositary receipts (ADRs) shot more than 11% higher in price on the back of two successive, bullish analyst updates in as many days. That double-digit gain came during a trading session when the S&P 500 index fell by 0.1%. Bet on Baidu, says analyst Well before market open, Jefferies' Thomas Chong upped his price target on Baidu substantially. He now believes the company's ADRs could rise to $157 per ADR, where before he thought their ceiling was $108. In making the change, he maintained his buy recommendation on the company. Image source: Getty Images. According to reports, Chong is convinced that the artificial intelligence (AI) Baidu has embraced so fully and rapidly will have a very positive effect on its fundamentals. He noted several positive developments in this area, specifically the company's success in partnering with large companies on AI cooperation, and its becoming a top earner of AI cloud revenue. Additionally, one factor that sets Baidu apart is that it's developing its own AI accelerator chip, the Kunlun. One big bump Chong's upbeat new take on Baidu might not have had as much of an impact on Wednesday if it hadn't been for a peer's recommendation upgrade the day before. On Tuesday, Richard Kramer at Arete changed his rating on Baidu for the better. This is understating the case, as he moved it all the way up from sell to buy, tagging it with a price target of $143 per ADR.