JPMorgan has issued a research report reassessing the business structure of Baidu Group-SW. The firm has increased its target price for Baidu's Hong Kong-listed shares to HK$225 from HK$195 and for its US-listed shares to $230 from $200, while maintaining an "Overweight" rating. The bank forecasts that as the proportion of AI business grows systematically and the drag from the advertising business weakens due to a smaller base, this trend will continue to strengthen through 2026. The report notes that market expectations previously suggested capital would rotate from Baidu to Kunlun Chip following its IPO. However, Baidu's first-quarter results this year countered this narrative. Baidu Core AI business revenue reached RMB 13.6 billion, a 49% year-over-year increase, accounting for over half of Baidu Core revenue for the first time at 52%. The bank's updated sum-of-the-parts valuation indicates that the AI business alone is valued at approximately $169 per ADS, exceeding the current share price level before accounting for the traditional business, iQiyi, or net cash.