Dear Reader,

Most investors have never heard this before …

But there’s a strange, 100-year-old investment secret …

Discovered just before the Great Depression …

That accurately called some of the biggest stock winners we’ve ever seen:

It pinpointed Apple at 50 cents …

Nvidia at 40 cents …

And Netflix at $3.70 …

Today, this investment secret is flashing green on a new set of stocks …

While market uncertainty could send some of America’s most popular stocks crashing down even further in 2026 …

This secret has identified three under-the-radar picks that could thrive in 2026 and beyond.

To learn their names and ticker symbols for FREE …

Click here NOW — before it’s too late.

Sincerely,

Eliza Lasky,
Weiss Advocate

---

Today’s Exclusive News

Why Baidu’s Quiet Spin-Off Could Unlock a Major Re-Rating

Reported by Jeffrey Neal Johnson. Originally Published: 1/7/2026. 

Key Takeaways

• Baidu is unlocking significant shareholder value by spinning off its hardware division as an independent, publicly traded entity.
• The new subsidiary is uniquely positioned to supply high-performance computing chips to a domestic market cut off from foreign suppliers.
• Moving the hardware business to a separate entity improves capital efficiency and allows the core search business to focus on profitability.

After months of frustration and sideways trading, investors in Baidu (NASDAQ: BIDU) finally have a tangible reason for optimism. Over the last few weeks the stock has risen roughly 15%, reclaiming the psychologically important $148 level. While a broader recovery in Chinese tech stocks has helped, the primary driver of this rally is a specific strategic move by management.

On Jan. 1, 2026, Baidu confidentially filed for an initial public offering (IPO) of its artificial intelligence chip subsidiary, Kunlunxin, on the Hong Kong Stock Exchange.

REVEALED: America just unlocked a $500 trillion asset (Ad)

REVEALED: America just unlocked a $500 trillion asset

Everyone’s talking about AI stocks but almost no one is talking about what AI actually runs on.

Nickel. Copper. Cobalt. Manganese.

America just secured exclusive rights to the largest untapped supply on Earth.

One company is already in position and this could be one of the most important AI infrastructure plays heading into 2026.The name and ticker are available here now >>>

For years the market viewed Baidu as simply the “Google of China” — a legacy search engine dependent on advertising. That narrow lens overlooked the billions Baidu invested in cloud computing and hardware. The planned spin-off represents a valuation reset. By separating its hardware division, Baidu is signaling a willingness to unlock value within its complex corporate structure and show the market that it is more than an ad platform — it is a diversified holding company with high-growth assets finally getting recognized.

Filling the Silicon Vacuum in China

To understand why this spin-off is moving Baidu’s stock price, investors should know what Kunlunxin actually does. Kunlunxin is Baidu’s unit dedicated to designing AI accelerators — high-performance chips used to train and run artificial intelligence models.

The unit is targeting a valuation of roughly $3 billion (RMB 21 billion). Importantly, Baidu plans to retain a controlling stake of about 59%, so shareholders still participate in the unit’s upside while Kunlunxin receives its own market valuation.

The timing is notable. U.S. export controls have effectively prevented Chinese firms from buying the most advanced chips from American suppliers like NVIDIA (NASDAQ: NVDA), creating a silicon vacuum in the world’s second-largest economy. Domestic tech firms need high-performance alternatives to support their AI projects, and they prefer local suppliers to avoid future supply-chain risks.

Kunlunxin is well positioned to fill that void. Its chips already power Baidu’s internal workloads, including the Ernie Bot platform, which serves more than 430 million users. Baidu’s role as the local partner for Apple Intelligence services in China (powering AI features on the iPhone 17) also lends credibility to its hardware and software stack that few domestic competitors can match.

Why the Parts Are Worth More Than the Whole

From a financial perspective, the Kunlunxin IPO is a classic sum-of-the-parts play. Large conglomerates frequently suffer a conglomerate discount, where the market values a complex company lower than the combined value of its individual businesses.

Think of it like buying a pre-assembled fruit basket: you might pay $20 for the basket even though the apples, oranges, and bananas inside would cost $30 if bought separately. The market prefers simplicity and often discounts bundled complexity.

Historically, Baidu’s stock tracked its core advertising business. When ad spending slowed, the market effectively assigned little or no value to its growing cloud and chip divisions. By giving Kunlunxin a separate market valuation of about $3 billion, Baidu forces analysts to re-evaluate the company on a parts basis. Analysts will now need to add the chip unit’s value to the search business when valuing Baidu.

This approach mirrors successful restructuring efforts across the tech sector, including moves by Alibaba (NYSE: BABA). Baidu’s quick confidential filing also signals management’s push to enhance shareholder returns. The investor thesis becomes: you own a profitable, cash-rich search business and retain a majority stake in a fast-growing, independently valued chip company.

The Efficiency Play: Cutting R&D Costs

Beyond valuation, the split offers a clear operational benefit: improved capital efficiency.

Designing third- and fourth-generation AI chips is expensive, requiring billions in research, development and manufacturing. When Kunlunxin was fully internal, Baidu funded that R&D from advertising profits, which weighed on reported margins and made the core business look less profitable than it was.

With the spin-off, Kunlunxin can raise capital from external investors in Hong Kong to fund its research. That creates a favorable scenario for Baidu’s financial health:

• Margin expansion: Baidu Core (the search business) no longer bears the full cost of chip development, which should improve earnings per share (EPS).
• Retained upside: By keeping roughly a 59% stake, Baidu captures growth if Kunlunxin becomes a market leader without funding all the capital expenditures itself.
• Cash preservation: Baidu holds nearly $20 billion in cash. Offloading heavy chipmaking capex allows Baidu to deploy that cash for shareholder-friendly actions like share buybacks or dividends.

Risks, Rewards, and the Road Ahead

The bullish case is compelling, but risks remain. The Chinese AI sector is in the midst of a fierce price war — accelerated by startups such as DeepSeek in 2025 — which has driven down software and model costs.

That dynamic, however, can benefit hardware makers. As software becomes cheaper and more accessible, usage typically increases, driving demand for computing power and chips. So while software margins may compress, hardware volumes can expand.

Moreover, Baidu has a mitigation advantage: vertical integration. Unlike firms that sell only software or only hardware, Baidu owns the full stack — the chip (Kunlunxin), the cloud, and the app (Ernie) — enabling efficiencies that fragmented competitors may struggle to match.

Baidu’s analyst community has reacted positively. The consensus rating currently sits at Moderate Buy, with major firms revising targets higher. Jefferies raised its target to $181 and JPMorgan set an overweight target of $188. With the stock trading near $148, these forecasts imply meaningful upside. The spin-off appears to be the catalyst repositioning Baidu from a legacy search company into a diversified, efficient, and more investable AI holding company.

Thank you for subscribing to The Early Bird, MarketBeat’s 7:00 AMnewsletter that covers stories that will impact the stock market each day.

This email is a paid sponsorship for Weiss Ratings, a third-party advertiser of The Early Bird and MarketBeat. 

11780 US Highway 1,
Palm Beach Gardens, FL 33408-3080
Would you like to edit your e-mail notification preferences or unsubscribe[/link] from our mailing list?Copyright © 2025 Weiss Ratings. All rights reserved.
 
 
If you have questions or concerns about your newsletter, don’t hesitate to email our South Dakota based support team at contact@marketbeat.com.

If you no longer wish to receive email from The Early Bird, you can unsubscribe.

© 2006-2026 MarketBeat Media, LLC. All rights reserved.
345 N Reid Pl., Suite 620, Sioux Falls, S.D. 57103-7078. USA..

Today’s Featured Link: Buy AES Immediately (From Chaikin Analytics)