We recently compiled a list of the 15 AI Stocks Every Investor Should Be Watching. In this article, we are going to take a look at where Baidu, Inc. (NASDAQ:BIDU) stands against the other AI stocks.
No conservation about artificial intelligence today stands complete without the mention of DeepSeek. As reported by The Information, the Chinese AI startup that has startled the world of AI with its self-proclaimed cheaper and more efficient AI models is now looking for outside funding. The startup has drawn interest from names such as Alibaba and state funds, the report noted. These low-cost AI models that DeepSeek has presented recently have stirred up investor skepticism, making it quite evident that China is leaving no stone unturned to keep up in the AI arms race.
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With fame, however, comes challenges. For DeepSeek, the surge in demand has caused outages at the small startup. Due to this reason, the company needs more AI chips and servers so that it can handle the fast-growing usage of its models, all while supporting model development. According to the report, funds that have contacted DeepSeek include China Investment Corp and the National Social Security Fund. It further noted that the startup’s executives and hedge fund parent, High-Flyer Capital Management, are also discussing the potential shift to building a business that generates revenue, eventually profiting from research.
The move is in line with China’s efforts to bolster the country’s economy and advance its technological capabilities. This has been made evident from China’s President Xi Jinping’s recent meeting with private sector business leaders, including Alibaba co-founder Jack Ma and Liang Wenfeng, founder of DeepSeek.
“It’s a tacit acknowledgement that the Chinese government needs private-sector firms for its tech rivalry with the United States. The government has no choice but to support them if it wants to compete with the United States.”
-Christopher Beddor, deputy China research director at Gavekal Dragonomics in Hong Kong.
In a similar move announced before this news, OpenAI also plans to revamp its for-profit arm into a public benefit corporation. The move intends to ease restrictions imposed by its current non-profit parent and also increase investments.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A modern internet space with a person using Baidu services on a laptop.
Baidu, Inc. (NASDAQ:BIDU)
Number of Hedge Fund Holders: 54
Baidu, Inc. (NASDAQ:BIDU) is a Chinese internet giant and AI pioneer, known for its noteworthy investments in artificial intelligence technology and its position as the dominant search engine within the country. On February 19, Bernstein raised the firm’s price target on the stock to $108 from $87 and kept a “Market Perform” rating on the shares. According to the firm, Baidu, Inc. (NASDAQ:BIDU) has reported in-line results, with AI Cloud performing particularly well. The firm noted that AI Cloud grew 26%, and that Baidu has also discussed about more buybacks this year – with up to $3.3B quota to spend till December 2025.
Overall BIDU ranks 13th on our list of the AI stocks every investor should be watching. While we acknowledge the potential of BIDU as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BIDU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.