Opinion: Here’s the Biggest AI Bargain Right Now (Hint: It’s Not NVIDIA)

The Magnificent Seven could stay magnificent in 2026, but if you’re like many and are a bit nervous about extended valuations and the potential for more scares that interrupt the AI trade at some point, there might be more relative value in the AI names that are outside of the much-followed group. Undoubtedly, if you’re an index-heavy investor, you probably have a generous weighting towards the seven names anyway.

In this piece, we’ll look at one of the more overlooked, but still powerful players in the AI race that I think value-minded investors might be overlooking for some reason or another.

Undoubtedly, it’s getting harder to find value in today’s market, especially if you want a good seat to the AI show. That said, for those willing to explore potential opportunities in the Chinese market, I do think there are some of those growth at a reasonable price (GARP) options out there.

Baidu stock: AI value hiding in plain sight?

When it comes to Chinese internet giant Baidu (NASDAQ:BIDU), I think investors stand to get AI-powered growth at a very reasonable price. Additionally, with a 0.43 beta, investors might be able to enjoy a less choppy ride once the next market-wide correction in U.S. markets finally happens.

At the time of this writing, shares of Baidu trade at 10.8 times trailing price-to-earnings (P/E). Good luck finding anything that cheap that’s remotely tied to the AI trade. When it comes to Baidu, the firm is pretty much one of the leaders in China with its Ernie model and AI being sprinkled across many parts of its business. Undoubtedly, the AI story is really not all too different from that of some of the Mag Seven companies.

Betting big on AI models and chips

With the company also looking to become a bigger force with AI chips to lessen the dependence on GPU makers, it seems like the Baidu story rhymes a lot with the one that’s playing out for Alphabet (NASDAQ:GOOG) or Google right now.

As you may know, Alphabet shares have enjoyed an incredible upward move in recent months, thanks in part to its leadership in the AI race, with its Gemini 3.0 model, but also optimism about its TPUs (Tensor Processing Units), which could make it a force to be reckoned with in AI chips, a market that’s been dominated by Nvidia (NASDAQ:NVDA) in these earlier innings of the AI race.

With Baidu recently pulling the curtain on the roadmap for its Kunlun Chips, launching its first M100 chips next year, with the M300 to follow the year after, there’s reason to be a tad more bullish on the dirt-cheap Chinese AI innovator.

With JPMorgan speaking positively about Baidu’s Kunlun AI chips, referring to them as “best positioned” in the region, investors may wish to take notice before the firm has a chance to hit the ground running in AI chips come 2026.

Could Baidu be in for a Google-like surge as well?

I guess the big question is whether Baidu has what it takes to live up to the Google playbook. Unlike Gemini 3.0, which impressed and helped jolt shares of Alphabet, Baidu’s latest Ernie 5.0 model hasn’t been met with rave reviews.

In fact, it’s a less impressive release that might have some doubting the firm’s ability to pull further ahead in AI. Either way, I think it’s a mistake to doubt Baidu just because of one less-than-incredible AI model release. It’ll be very interesting to see how Baidu responds as it looks to shock and awe, as Gemini 3.0 did just a few weeks ago.

Either way, I view Baidu as a top contender in the AI race over in China and think the bar is too low with shares trading at less than $120 per share. With Baidu recently announcing broad layoffs following a hefty third-quarter loss, it certainly seems like Baidu has the discipline to control costs as it goes on the offensive with AI.