Baidu Shares Jump Over 10% to Overbought Level Following ChatGPT-Like Bot Launch
BEIJING, February 7 (TMTPOST)— The U.S.-listed shares of Baidu Chinese internet giant rallied more than 12% over the ChatGPT-like chatbot it unveiled on Tuesday.
Source: TMTPost
American depositary receipts of Baidu closed at the highest since March, 2, 2022 and raked in about $5.1 Billion of market value within a day, more than a basket of ten stocks tied to artificial intelligence (AI) have added all year amid triple-digit rallies, according to Bloomberg. However, a key technical indictor shows the rally may be overdone as the relative strength index (RSI) reading of Baidu topped 70, a threshold that indicates shares are overbought and generates a potential sell signal.
Earlier Tuesday, Baidu confirmed news about launch of, an AI-powered conversational bot like OpenAI's wildly popular ChatGPT. Preparation for Ernie Bot prior to going online was about to complete and the app is set to be available for the public when it ends internal testing in March, according to Baidu. “The test could open up earlier based on the pace of Google and Microsoft,” Baidu told Chinese financial news media outlet. “Baidu has acquired all the ChatGPT-related technologies.” Ernie Bot is at the layer of model in Baidu’s full-stack four-layer AI architecture, the search engine giant added.
The stock surge highlighted the market craze and a massive wave of interest in AT stocks among investors spurred by ChatGPT recently. ChatGPT has attracted 100 million monthly active users since its public debut in November, making it the fastest-growing consumer app in history, a research report published by UBS estimated. There is absolutely no other Chinese company that has the similar capability in natural language processing to Baidu, Chinese media cited industry analysis.
Though it’s difficult to assess how much valuation should be quantified from Ernie Bot at this stage, the rollout should strengthen Baidu’s competitive moat from other search engines, and could enhance the attractiveness of advertising on the platform, said Kai Wang, a senior equity analyst at Morningstar.