Why Is Baidu Stock (BIDU) Soaring Today?

Baidu (BIDU) shares are climbing in pre-market trading after the Chinese tech giant announced plans to spin off its AI chip unit, Kunlunxin, and list it in Hong Kong. The move comes as Chinese chipmakers ramp up fundraising efforts, supported by Beijing's push to boost domestic semiconductor production. On Friday, BIDU stock is up roughly 12% in pre-trading as of this writing.Claim 70% Off TipRanks This Holiday SeasonUnlock hedge fund-level data and powerful investing tools for smarter, sharper decisions Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential Baidu's Kunlunxin Files for Hong Kong IPO Founded in 2012, Kunlunxin is Baidu's in-house AI chip arm, designed to power its AI ecosystem and compete with global chipmakers in the fast-growing AI sector. Baidu currently owns around 59% of Kunlunxin. According to Baidu's official statement, the company has confidentially filed for a Hong Kong listing of Kunlunxin. However, details like the size and structure of the offering have not been finalized. The spin-off still needs regulatory approval, including from China's securities regulator, and there is no guarantee it will go ahead. The company added that Kunlunxin would remain a Baidu subsidiary following the IPO. Baidu's Big Bet on AI Kunlunxin plays a key role in Baidu's goal to become a full-stack AI company, covering hardware, servers, data centers, and AI models and applications. It now operates more independently and has expanded sales to third-party customers beyond Baidu. While Baidu still relies on Nvidia (NVDA) chips for AI computing, Kunlunxin has allowed the company to increasingly use its own chips in data centers running Ernie AI models. Overall, Baidu is banking on generative AI to fuel future growth. However, it is under growing pressure from fast-improving open-source models like DeepSeek and a surge of AI-first apps challenging its market share. Baidu aims to use the spin-off and IPO to boost Kunlunxin's visibility and reputation. The company says this will highlight Kunlunxin's standalone value, attract investors focused on semiconductors, and create more funding opportunities. Is Baidu Stock a Buy Now? According to TipRanks, Wall Street has a Strong Buy consensus rating on BIDU stock, based on 12 Buys and two Holds assigned in the last three months. Baidu's average stock price target of $156.12 implies 20% upside potential.