12 Cheap Chinese Stocks to Buy According to Hedge Funds

5. Baidu, Inc. (NASDAQ:BIDU)

Number of Hedge Fund Holders: 42

Forward P/E Ratio: 8.55

Baidu, Inc. (NASDAQ:BIDU) is a Chinese tech giant that has the largest internet search engine in China. The company generates the majority of its revenue from advertising and search. Baidu also provides online marketing services including pay-for-performance and auction-based services. The company is focusing on AI business and enhancing its presence mainly in autonomous driving technology.

Baidu, Inc. (NASDAQ:BIDU) is working on AI and aims to make it a key growth driver. The company just revealed its smart glasses powered by an AI assistant. Similar to Meta’s glasses, Baidu’s eyeglasses also have cameras to capture photos and videos and support voice interactions powered by Ernie. The glasses are produced by the company’s hardware division firm, Xiaodu.

In addition to that, Baidu’s AI cloud services are also experiencing rapid growth. The company’s ERNIE is now handling over 600 million API calls daily, as of Q2 2024. ERNIE’s capabilities through API calls have assisted the company’s customers in improving their matching process between job descriptions and resumes, helping firms reduce their labor costs by over 50%.

On top of being a leader in search and now investing in AI adds huge growth potential for Baidu. Moreover, the company’s autonomous vehicles through the Apollo project have garnered significant attention. Apollo Go has successfully achieved a 100% fully driverless ride-hailing service, practically implemented in the entire Wuhan municipality.

Baidu, Inc. (NASDAQ:BIDU) is well-positioned in the growing AI market in addition to the company’s successful search business. BIDU has a forward P/E of 8.55 and it is currently trading at a discount of over 40% compared to its sector median of over 13.