10 Oversold Large Cap Stocks To Buy Now

6. Baidu, Inc. (NASDAQ:BIDU)

Market Cap: $32.02 billion

FWD PE Ratio: 8.50

YTD Share Price Decline: ~20.3%

Number of Hedge Fund Holders: 42

Baidu, Inc. (NASDAQ:BIDU) is a Chinese technology company that primarily focuses on the internet, AI, and cloud computing and holds a significant share in China’s search engine market. The company has been a pioneer in AI advancements, especially with its foundation models, including ERNIE Bot and ERNIE 4.0, which have been integrated into its products to deliver AI-native experiences.

Its services span across several sectors, including its Mobile Ecosystem, AI Cloud, and Intelligent Driving initiatives. The Mobile Ecosystem includes popular apps like Baidu App, ERNIE Bot, and Baidu Post, and offers search and feed-based content while integrating third-party services. AI Cloud provides enterprise and public sector solutions with AI-powered tools tailored for industries like transportation, energy, and finance.

In intelligent driving, Baidu (NASDAQ:BIDU) leads in autonomous ride-hailing through its Apollo Go service, which operates in multiple Chinese cities and is expanding with fully driverless services. Xiaodu, Baidu’s smart device division, holds the top position in smart displays and speakers in China.

Baidu (NASDAQ:BIDU) now plans to expand its Apollo Go driverless ride-hailing service internationally, targeting Hong Kong, Singapore, and the Middle East, as reported by The Wall Street Journal on October 9. The company aims to launch its Apollo 10.0 platform globally. The expansion is followed by intense competition in China, where Baidu operates over 400 robotaxis in cities like Wuhan. The company is shifting focus from its slowing ad business to AI, autonomous driving, and cloud computing for growth.

Ariel Investments stated the following regarding Baidu, Inc. (NASDAQ:BIDU) in its first quarter 2024 investor letter:

“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.”