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2 Tech Buys for March: Baidu.com, Inc. (ADR) (BIDU), Google Inc (GOOG)

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Baidu (BIDU)Once the market’s fast-growing darlings, many technology stocks now fully or nearly qualify as blue chip stocks. Even more surprisingly, many of them trade at conservative valuations. Two of these stocks — Google Inc (NASDAQ:GOOG) and Baidu.com, Inc. (ADR) (NASDAQ:BIDU) — stand out as great buying opportunities for patient investors.

Google
Google’s 15% rise over the last three months, to a current price near $800, may scare plenty of investors away. But haggling over price on this stock could leave you Google-less; there is little reason for Google to trade at a discount given its outstanding prospects. If the company’s growth in online search isn’t enough to convince you that Google Inc (NASDAQ:GOOG)’s stock is worth buying, there are several other areas of potential expansion that could prove lucrative as well.

For instance, Google’s aggressive stance on acquisitions, combined with its $48 billion cash hoard, could prove very helpful in creating new business opportunities for the company over the next few years. Last Thursday, Google CFO Patrick Pichette explained that Google Inc (NASDAQ:GOOG) plans to keep its $48 billion in cash on hand in order to “pounce” on acquisitions when the opportunities surface. As an example, Pichette cited Google’s $12 billion acquisition of Motorola; the example hints at management’s continued willingness to make large acquisitions.

In contrast, Apple Inc. (NASDAQ:AAPL) seems to be approaching the law of large numbers when it comes to acquisitions. With a $400 billion market cap and more than $100 billion sitting idle, Apple is running out of growth opportunities meaningful enough to move the dial. As the company’s board of directors continues their “active discussions about returning additional cash to shareholders,” the stock continues to fall.

As Google ponders more potentially aggressive acquisitions, it’s stirring up a new, Apple-like hardware strategy from within. Though its $1,300 price tag is raising eyebrows, the launch of the new Chromebook Pixel is the first evidence of Google’s major shift in strategy in an attempt to profit from hardware sales up front. Though Google has a long way to go to be on par with Apple when it comes to consumer electronics, its attempt is noteworthy, adding upside potential to Google’s stock over the long haul.

Google may carry a seemingly hefty P/E at 24.5. But investors need only to look at the company’s forward P/E ratio to put things in clearer perspective. Trading at just 17.7 times expected future earnings, Google is still a solid choice for buy-and-hold investors looking for a long-term core holding.

Baidu
China’s online search king, Baidu.com, Inc. (ADR) (NASDAQ:BIDU), trades at a significant discount from its price one year ago. In fact, the stock fell more than 15% in February alone, after the company reported plummeting growth rates in average client ad spending during the fourth quarter, and issued guidance for higher research and development spending going forward. Decelerating growth and strengthening competition are now top investor concerns.

But a closer look reveals that the sell-off has created a buying opportunity. The company’s decelerating revenue growth during the quarter was primarily due to the slowing growth in ad spending per customer.

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