Baidu's $BIDU-SW(09888)$  $Baidu(BIDU)$   surge this week didn't come out of nowhere. The submission of Kunlun Chip's listing application to the Hong Kong Exchange feels like a genuine inflection point, not just a headline-driven rally. A 15% move in a week reflects the market starting to reassess Baidu beyond its legacy search business and focusing on its AI asset value.

What really caught my attention is how meaningful Kunlun Chip is to Baidu's overall valuation. This isn't a peripheral unit — it's already in its third generation, supports ERNIE's inference workloads, and is embedded across cloud, autonomous driving, and AI infrastructure. When investment banks estimate Kunlun's value at a level approaching a third of Baidu's current market cap, it highlights just how much of Baidu's AI potential has been underappreciated.

More importantly, the spin-off signals a strategic shift. By letting Kunlun operate as an independent, fundable entity, Baidu can accelerate chip R&D, bring in semiconductor-focused investors, and improve operational discipline. At the same time, the parent company becomes a cleaner AI platform story — combining models, chips, cloud, and real-world applications like robotaxis into a more transparent ecosystem.

Zooming out, this also feeds into my broader view on Chinese assets in 2026. The recent strength isn't just about liquidity or sentiment; it's increasingly about hard tech and domestic substitution. Companies that control core technologies — chips, models, and deployment — are starting to get differentiated treatment from the market, and that's a healthy shift.

So is Baidu undervalued? I believe it still is, even after the rally. If Kunlun's listing progresses smoothly and Baidu continues to execute on AI commercialization, the current valuation doesn't fully reflect its full-stack AI positioning. For me, Baidu represents not just a rebound trade, but a structural re-rating opportunity within China assets in 2026.

As a retail investor, I focus mainly on the US and Singapore markets, combining a mix of technical trading and long-term investing strategies. I enjoy analyzing charts, spotting patterns, and making calculated moves based on both market sentiment and fundamentals. While I'm not a professional, I treat my portfolio seriously and continue to learn and grow with each trade. If you're also navigating the markets and enjoy discussing stocks, options, or market trends, feel free to follow me. Let's learn and grow together as a community. 

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