Macquarie upgraded its rating for Baidu (BIDU-SW) from Neutral to Outperform, significantly raising the target price from $96 to $171. The upgrade is based on Baidu's strategic shift towards more diversified revenue sources, with growing optimism around its AI cloud, robotaxis, and in-house Kunlun AI chips. Analysts at Macquarie noted that Baidu's chip design department could contribute significantly to the company's valuation. Despite lowering adjusted net profit forecasts for 2025 and 2026 due to a decline in the core search business, the bank sees a positive outlook as Chinese enterprise demand for AI cloud services reaches an inflection point. This news comes as other institutional investors have also been increasing their positions in the company.