10 Best Autonomous Driving Stocks To Buy According to Hedge Funds

6. Baidu, Inc. (NASDAQ:BIDU)

Number of Hedge Fund Holders: 54

Baidu, Inc. (NASDAQ:BIDU), a leading Chinese technology company, operates the largest internet search engine in China and has become a prominent name in the autonomy industry. The company runs Apollo Go Robotaxi, one of the few operational autonomous ride-hailing platforms globally, offering services in Wuhan, China. This platform provides Baidu, Inc. (NASDAQ:BIDU) with valuable real-world experience and insights into customer preferences.

On November 29, Baidu, Inc. (NASDAQ:BIDU) received its first license to test autonomous vehicles outside mainland China. Granted by Hong Kong’s Transport Department, this pilot license allows the company to trial 10 autonomous vehicles in North Lantau. The permit marks a significant milestone under Hong Kong’s new regulatory framework, showcasing Baidu’s progress in expanding its autonomous driving capabilities.

In contrast, however, JPMorgan downgraded Baidu from Overweight to Neutral, reducing its price target from $105 to $85 on November 27. The downgrade reflects concerns over declining earnings visibility amid uncertainties surrounding China’s economic recovery. While JPMorgan anticipates Baidu’s core advertising revenue to bottom out in Q1 2025 and gradually rebound, the pace of recovery remains uncertain. Despite these challenges, Baidu’s substantial cash reserves—approximately 84% of its market capitalization—and a $1 billion annual capital return policy provide a cushion against downside risks. The company’s cash valuation is also notably low, at just twice its estimated 2025 earnings, offering additional support to its long-term outlook.