Why Is Baidu Stock Rising Premarket?

A report released on Thursday stated that Baidu, as well as Alibaba, have begun using their own chips for AI models, a step aimed at reducing their reliance on Nvidia.

Baidu, Inc.'s U.S.-listed shares were up 5% in premarket trading on Friday, mirroring gains in its Hong Kong shares on optimism around artificial development at the Chinese giant.

Baidu's HK shares ended 8.1% higher on Friday. The previous day, The Information reported that Chinese tech companies, including Baidu and Alibaba, have started using their own chips in AI models.

The move is seen as a major step in reducing their reliance on chips from Nvidia, at a time when the U.S. has disallowed the supply of the top-end American designs.

With the rally, Baidu is building on the sharp upswing seen in peer Alibaba's shares in recent weeks, also on AI optimism.

"$BIDU patiently waited for 2 years for this to finally pop," a Stocktwits user said, as retail sentiment for the stock climbed higher in the 'bullish' territory.

As of last close, BIDU shares are up 34.45%, below the 86% rise in Alibaba's stock and 41% rise in KraneShares CSI China Internet ETF, which tracks Chinese tech companies.

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