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Morgan Stanley Slashes iQIYI, Inc. (IQ) Forecasts, Is the Worst Still Ahead?

iQIYI, Inc. (NASDAQ:IQ) is among the best Chinese stocks to buy according to hedge funds. On April 22, Morgan Stanley cut the price target on iQIYI, Inc. (NASDAQ:IQ) from $2.10 to $1.50 and reiterated an Equalweight rating on the stock. The firm also lowered its revenue forecasts by 6%, 8%, and 10% for 2026, 2027, and 2028, respectively. Not only that, non-GAAP net profit estimates for the same period dropped 71%, 40%, and 37%. This was mainly due to operating de-leveraging.

According to Morgan Stanley, early signs of rebound in user acquisition, engagement, and the competitive environment will take at least six months to materialize. The firm sees upside to be driven by content enhancements and potential blockbusters, especially mid-form series and AI-generated content, in addition to offline expansion. Apart from these, a favorable regulatory landscape, including faster license feedback, could drive further upside.

What’s interesting is the company’s strategy that leverages AI to broaden supply, which the firm believes differentiates iQIYI, Inc. (NASDAQ:IQ). From production know-how and creator services to IP access and commercialization capabilities, the company enjoys a strong foundation, Morgan Stanley noted.

Jefferies sees the company’s total revenue matching the expectations, with divergent performance observed across segments. The firm trimmed the price target on iQIYI, Inc. (NASDAQ:IQ) to $1.82 from $2.22 and reiterated a Buy rating on April 22.

iQIYI, Inc. (NASDAQ:IQ) is a Beijing-based online entertainment video services provider. Founded in 2009, the company operates an internet video content platform, provides experience services, and offers membership and licensing services, among others.

While we acknowledge the risk and potential of IQ as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than IQ and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years 

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The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

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Wall Street calls this $3 stock a “Melting Ice Cube.” They said the same thing about BTI before it returned 90%.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

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Today, we have identified a nearly identical pattern in a digital-first giant trading at $3.

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