Nomura upgraded Baidu's stock to "Buy" and increased its price target to $140 from $135. The upgrade is based on the significant growth potential of Kunlunxin (KLX), Baidu's chip design subsidiary, which Nomura identifies as a leading domestic chip designer. The bank believes that restrictions on the procurement of advanced chips from overseas will create opportunities for companies like KLX to meet the strong demand for AI in China. Nomura projects that KLX's revenue could reach RMB 2.6 billion in fiscal year 2025 and RMB 5.4 billion in 2026. This positive outlook for the AI chip division comes as the broker notes that Baidu's traditional advertising business remains weak.