7 Most Undervalued Foreign Stocks to Buy According to Analysts

3) Baidu, Inc. (NASDAQ:BIDU)

Forward P/E Ratio as of 10 October: 9.64x          

Average Upside Potential: 25.30%

Number of Hedge Fund Holders: 42

Baidu, Inc. (NASDAQ:BIDU) is engaged in the provision of internet search services in China.

Baidu, Inc. (NASDAQ:BIDU)’s commitment to AI innovation remains evident in the scaling and affordability of its AI offerings, which include ERNIE models and the Apollo Go autonomous ride-hailing service. The company highlighted that Apollo Go transitioned to fully driverless services in Wuhan and has been testing its 6^th generation autonomous vehicle, the RT6. Baidu, Inc. (NASDAQ:BIDU) continues to improve margins and enhance market share in the GenAI and LLMs market.

The company remains focused on enhancing its mobile ecosystem with AI technology to create long-lasting user value. Market experts remain optimistic about Baidu, Inc. (NASDAQ:BIDU)’s AI Cloud business, which has been witnessing accelerated growth as a result of strong demand for AI infrastructure and models. Also, its autonomous driving innovation, primarily Apollo Go, has been making strides toward commercial viability.

Wall Street believes that Baidu, Inc. (NASDAQ:BIDU)’s technological leadership and first-mover advantage in AI should strengthen its competitive position. The company has been exploring various business models and partnerships in a bid to scale up its robotaxi services. Baidu, Inc. (NASDAQ:BIDU)’s emphasis on innovation and market expansion, together with a commitment to making AI solutions more accessible, places the company favorably for future growth.

As per Wall Street, the shares of Baidu, Inc. (NASDAQ:BIDU) have an average price target of $128.75. Ariel Investments, an investment management company, released its first-quarter 2024 investor letter. Here is what the fund 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.”