Baidu Inc shares jumped by the most in more than three years in Hong Kong as optimism over its AI chip potential grows. 

The stock soared 16 percent in the Hong Kong Special Administrative Region, the most since March 2022 and adding $6.4 billion in market value.

The surge came after Arete Research Services LLP lifted its rating on Baidu’s American depositary receipts to buy from sell — it had held the only sell recommendation on the stock since it downgraded it last May.

Other analysts at firms including Citigroup Inc and Goldman Sachs Group Inc also published bullish views on the tech company on Wednesday, citing its growth potential from areas such as its cloud business and its latest reasoning model update.

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Shares of the Chinese mainland’s largest search engine operator have climbed more than 45 percent this month on optimism for its business strategy, topping a gauge of peers. That comes as analysts turn gradually more positive on the company’s artificial intelligence plans following earlier disappointments.

As the stock soared, options bets also grew. Almost 170,000 contracts changed hands on Wednesday, more than triple the 20-day average. The derivatives have been active in recent days, reaching a record number of trades last week.

Baidu’s chip venture has the potential to more than offset the drag from its struggling online advertising business, according to Arete analysts Shawn Yang and Richard Kramer.

The company signed a strategic cooperation framework agreement to collaborate in AI technologies with China Merchants Group on Monday. It could be a “sizable multi-year contract” that could boost Baidu’s cloud revenue, according to Citigroup analysts including Alicia Yap. They added that the chief executive officer of the Kunlun unit said at a Tuesday event that its latest chip version has achieved mass production.

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Kunlun said in August it has secured orders from China Mobile Ltd to power AI servers, and that the value of its contracts is larger than rivals’. The business has gone through a few funding rounds in recent years to power its development of AI chips.

Goldman Sachs analysts said in a report Tuesday that Baidu’s latest AI model, Ernie X1.1, showed “significant improvements” that even surpass a DeepSeek model.