Baidu named top AI stock in China by Morgan Stanley with an upgrade to Overweight

Morgan Stanley has upgraded shares of Baidu (NASDAQ:BIDU) to Overweight from the previous rating of Equal Weight and upped the price target to $190 per share from $160. Baidu, which has the best exposure to AI in China, according to Morgan Stanley, is expected to experience a business transformation with better productivity and efficiency through increased IT spending and accelerated cloud adoption. The analysts are optimistic that Baidu will gain cloud market share due to its impressive AI capabilities. China’s AI industry is currently at an inflection point, with Baidu being the best play to capture the $7.4 trillion AI internet opportunity. Morgan Stanley assigns a 12% upside to its 2025 core revenues in an AI-enabled scenario, and regulatory approval may be a near-term catalyst.