10 Best Machine Learning Stocks According to Analysts

3. Baidu, Inc. (NASDAQ:BIDU)

Number of Hedge Fund Investors  in Q1 2024: 48

Analyst Average Share Price Target: $146.73

Upside: 58%

Baidu, Inc. (NASDAQ:BIDU) is a Chinese search services, marketing, cloud computing, and other software services provider. It is also heavily invested in the machine learning space and provides industrial machine learning applications through platforms such as the PaddlePaddle. Baidu, Inc. (NASDAQ:BIDU)’s heft allows it to compete with Chinese computing giant Alibaba, and it was one of the first movers in the AI chatbot industry in 2023 when it announced the Ernie Bot. At the same time, tensions between the US and China, particularly when it comes to chips, means that Baidu’s AI initiatives might not be able to access the same level of computing power as other firms. Additionally, the stock trades at a forward P/E of just 9, which is indicative of investor pessimism surrounding China. The firm’s trailing twelve month EPS is 7.45, so even if were to estimate a ‘modest’ P/E of 20 which removes the Chinese pessimism, then Baidu, Inc. (NASDAQ:BIDU)’s share price would have been $149 which is significantly higher than the current price of $92.

Ariel Investments mentioned Baidu, Inc. (NASDAQ:BIDU) in its Q1 2024 investor letter. Here is what the firm said:

Alternatively, several positions weighed on performance. China’s internet search and online community leader, Baidu, Inc. traded lower alongside Chinese equities as intensifying problems in China weighed on investor sentiment during the period. The company continues to invest heavily in Artificial Intelligence (AI) and recently launched its generative AI, Ernie Bot, aimed at rivaling Open AI’s ChatGPT. While monetization of the new technology is largely dependent on regulatory review, we think Baidu should continue to experience margin improvement with the ongoing implementation of efficiency and profitability initiatives. While some investors remain on the sidelines due to uncertainty surrounding China’s economic growth, government regulations, and the political rhetoric towards Taiwan, we remain enthusiastic about Baidu’s longer-term opportunity for revenue growth and margin expansion across internet search, cloud, autonomous driving, artificial intelligence and online video.