0905 GMT - Baidu has likely unlocked its hidden value by leveraging its large language models, cloud and AI chips, Citi analysts say in a research note. Baidu announced a strategic agreement with China Merchants Group earlier this week. Although it didn't disclose the size or duration of the contract, Citi thinks it's likely to be a large contract with collaboration over multiple years. Citi sees upside risks to Baidu's cloud revenue in 2026-2027. However, any revenue recognition from this deal could be at a later stage after subsequent discussions in the coming months. Baidu's AI chip development has also buoyed investor sentiment, the analysts say. Baidu's Kunlun chip 3.0 has achieved mass production and scalable application, according to management. Baidu's H-shares ended 16% higher at HK$131.00. (sherry.qin@wsj.com)

(END) Dow Jones Newswires

September 17, 2025 05:05 ET (09:05 GMT)

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