Baidu is one of the few major tech companies today where roughly half of its market value can be justified simply by looking at its balance sheet. The company holds a net cash position of around 155 billion yuan (roughly $21.7 billion as of mid-2025) and total cash and investments of 296 billion yuan (about $41.6 billion as of the end of the third quarter of 2025), while the entire company is trading on the market at approximately $40 billion. In other words, investors are buying an operating business that generates billions in profits for a relatively small premium over cash. That is why Baidu appears on lists of stocks with a low risk of a sharp decline, even though it is a Chinese company under regulatory pressure.

The key question in this article is different from that for most artificial intelligence stocks. It’s not whether Baidu is overvalued, because by conventional measures, it’s cheap. The question is whether the company will succeed in transforming its maturing and declining…