Baidu Inc (NASDAQ: BIDU) has been in a downtrend over the past four months but a Nomura analyst is convinced the story moving forward will be a different one.

Jialong Shi raised his rating on the tech company this week to “buy” and said its shares could climb to $145 which suggests a 20% upside on its previous close.

His constructive view is partially based on valuation that the analyst says is attractive now that Baidu stock has lost over 20% since late July.  

The news arrives only days after the Chinese internet firm reported better-than-expected revenue for its fiscal third quarter

Baidu also said the U.S. chip export restrictions will likely have a limited impact as it has enough AI chips stockpiled already.

Shi said his discussions with tech experts suggest Ernie Bot – the artificial intelligence enabled chatbot of Baidu currently beats peers when it comes to overall performance.

The Beijing-headquartered firm could have the upper hand in this high-growth market provided that execution on its AI initiatives remains robust, he added.

Other reasons cited for the bullish view on Baidu stock include the management’s commitment to aggressively buying back shares.

The Nomura analyst also raised his forecast for adjusted operating profit in FY23F for the tech giant by 4.7% in his recent research note. Earlier this week, analysts at Jefferies also said the Chinese stock along with Alibaba had significant hidden value.

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