4. Baidu, Inc. (NASDAQ:BIDU)
Number of Hedge Fund Holders: 43
Baidu, Inc. (NASDAQ:BIDU) was incorporated in 2000 and is headquartered in Beijing, China. The company offers internet search services in China, operating through Baidu Core and iQIYI segments. Baidu, Inc. (NASDAQ:BIDU) is one of the premier Chinese stocks to invest in.
On November 22, Baidu, Inc. (NASDAQ:BIDU) reported a Q3 non-GAAP EPADS of $2.37 and a revenue of $4.57 billion, outperforming Wall Street estimates by $0.17 and $100 million, respectively. The company also announced that it had received approval to test driverless vehicles in Beijing.
Morgan Stanley analyst Gary Yu on November 23 maintained an Equal Weight rating on Baidu, Inc. (NASDAQ:BIDU) but lowered the price target on the shares to $120 from $140. Following the company’s Q3 report, the analyst kept his revenue forecasts “largely unchanged,” but somewhat lifted Baidu, Inc. (NASDAQ:BIDU)’s core non-GAAP operating profit forecasts for 2022/23 to factor in margin improvement while slashing his target given the latest sector-wide de-rating.
According to Insider Monkey’s Q3 data, 43 hedge funds were bullish on Baidu, Inc. (NASDAQ:BIDU), compared to 45 funds in the prior quarter. John W. Rogers’ Ariel Investments is the biggest stakeholder of the company, with 2.60 million shares worth $305.6 million.
Baron Funds made the following comment about Baidu, Inc. (NASDAQ:BIDU) in its Q3 2022 investor letter:
“As part of our digitization theme, we reiterate our conviction in Baidu, Inc. (NASDAQ:BIDU) and InPost S.A. Baidu is a leading Chinese artificial intelligence company, which, in our view, is trading well below intrinsic value due to short-term economic and geopolitical uncertainties. We expect significant long-term upside given the company’s strong competitive position across several of China’s key growth industries. Baidu’s mobile ecosystem, which includes China’s dominant search engine, has over 620 million monthly active users. In our view, this ecosystem will benefit from the secular growth of China’s digital advertising industry, as well as the expansion of searchable content from established social media and e-commerce platforms resulting from recent regulatory reforms regarding data interoperability. Beyond its core search business, Baidu has invested heavily in cutting-edge technologies including cloud, autonomous driving, smart devices, and AI semiconductor chips. The company’s cloud business is one of the largest and fastest growing in China and is differentiated by its AI solutions and higher-value PaaS/SaaS offerings. Baidu has also developed leading autonomous driving technologies that it is commercializing through partnerships with top-tier Chinese auto manufacturers. We expect the company to sustain solid double-digit earnings growth over the next three to five years.”
