To The Moon

Recent$Baidu (BIDU) $The stock price has risen significantly, with an increase of as much as 50% since the beginning of the month. Many institutions believe that the commercialization and ecological value of AI such as Kunlun Core, Robotaxi, and Digital Human are gradually being revalued by the market. Previously, Kunlun Core's official Weibo announced that the company won the bid for China Mobile's 1 billion-level order for the centralized procurement project of artificial intelligence general computing equipment (inference type) from 2025 to 2026. Among them, in the "CUDA-like ecology" bid section, based on Kunlun Core's AI server products won the first bid share, of which bid package 1 and bid package 2 won 70% of the bid share, and bid package 3 won all the bid share. It is reported that Kunlun Core Technology, formerly known as Baidu Smart Chip and Architecture Department, will complete independent financing in April 2021.

CITIC Securities pointed out that currently$Baidu Group-SW (09888) $The overall valuation and price-performance ratio of the company is still relatively outstanding. The bank recommends paying attention to the trend and pace of improving the company's fundamentals, as well as the incremental space brought by businesses such as AI and autonomous driving. Everbright Securities stated that Baidu's net cash flow maintains a healthy level to support long-term strategic investment in AI. Carrot Kuaipao has achieved breakeven in Wuhan, its business model has been verified, the number of orders has accelerated, and its overseas expansion has been smooth; Kunlun chip shipments exceeded expectations. Self-developed large models + computing platforms + self-developed chips form software and hardware collaboration, improve the cost performance of training and reasoning, and jointly build AI ecological barriers. The bank continues to be optimistic about the ecological value of Baidu's AI, and the three major businesses of cloud computing, intelligent driving, and self-developed chips have opened up valuation space.

Go Long Baidu with Put Options

The current price on Baidu is US $135.35, we can sell itExpires October 24, 2025, exercise price 135, premium $805Put Option to go longBaidu。

This strategy can not only make profits when Baidu rises, but even if Baidu trades sideways or falls slightly, it can still rely on premium to earn profits.

Maximum benefit：

If Baidu's stock price is higher than or equal to $135 at expiration, the option will not be exercised and you retain all premium. The maximum gain is $805.

Maximum loss：

If the Baidu stock price drops to $0, you need to buy 100 shares at $135, with a total cost of $13,500. Subtracting premium received of $805, the maximum loss was $12,695.

Break-even point：

The breakeven point is $126.95 (i.e. the exercise price of $135 minus $8.05 per premium). As long as Baidu's stock price is higher than $126.95 at expiration, you are a net profit.

advantage：

• The limited gain ($805) is locked in at the start;

• The winning rate is high, and you can make a profit as long as the stock price does not fall sharply;

• If you want to buy Baidu stock in the first place, this method can reduce the buying cost.

Risk warning：

• Profit and loss are asymmetric, the maximum income is limited, but the potential loss is large;

• Requires a margin account to support selling naked Put;

• Closing positions before expiration or rolling operations can be considered to dynamically manage risk.