Baidu Stock (BIDU) showed a remarkable gain as soon as the Apollo Go showed a benefit from China's effort to bring robotaxi to the streets.
Why Is BIDU Moving Higher?
Baidu Stock (BIDU) Surged higher because of the increase in confidence that Baidu's Apollo Go, a leader in the burgeoning robotaxi industry in China, stands to benefit from recent policy developments. Local media reported on a draft of legal regulations on autonomous driving from a Beijing municipal agency. Analysts believe that this draft could facilitate the widespread use of robot axes.
Angus Chan, an auto analyst has observed that Beijing's proposed guidelines are in line with market expectations that the government will provide additional support for the commercial use of self-driving automotive vehicles. He emphasized that Baidu, a prominent company in China's autonomous driving sector, is likely to receive policy support due to its extensive robotaxi trials in numerous cities.
Can Baidu Lead The Autodriving Sector?
The recent policy support for robotaxi has boosted equities across the auto-driving sector, despite the fact that Baidu's autonomous-driving operations are a small part of the broader company, which is best known for its internet-search expertise and widely-used AI chatbots. The daily trading limit of more than a dozen companies in the sector was exceeded on Chinese exchanges.
Jialong Shi, the director of China internet research at Nomura, warned that the auto-driving business would not substantially impact the company's top line in the coming quarters. Lenny Zephirin, an analyst at Zephirin Group, concurred with this sentiment, asserting that the segment was insufficiently significant to influence the company's financial performance.
Traders are optimistic about the future of robotaxi, particularly in light of Beijing's announcement of support for ride-hailing and car rental services. Li Muhua, an analyst at Guotai Junan, anticipated that autonomous driving would become a significant transaction in the months ahead, buoyed by Tesla Inc.'s forthcoming robotaxi launch.
BIDU Stock Forecast Technical Analysis
In the technical outlook, BIDU is trading below the Moving Average wave from 150 to 250 MA line. In that case, we may expect a trend reversal once the price overcomes this area.
The most recent BIDU stock price action shows a buying pressure as a daily candle is present above the dynamic 20 day Exponential Moving Average. However, it is not enough to consider bottom formation as the ongoing market trend is still bearish.
In the volume structure, the most active level since August 2023 is at 102.90 level, which might work as a crucial resistance. In that case, a bullish reversal with a daily candle above the 102.90 resistance level could signal a potential buying pressure above the 115.00 area. Moreover, a stable market above the 108.00 level could signal a potential bullish continuation towards the 155.80 resistance level.
