Michael Burry’s Top 10 Stock Picks Heading into 2025

4) Baidu, Inc. (NASDAQ:BIDU)

Scion Asset Management’s Stake Value: $6,486,000

Number of Hedge Fund Holders: 42

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

Market experts are optimistic about Baidu, Inc. (NASDAQ:BIDU)’s scaling and affordability of its AI offerings, such as ERNIE models and the Apollo Go autonomous ride-hailing service. The company continues to focus on improving margins and enhancing its market share in the GenAI and LLMs market. Its AI Cloud business is seeing accelerated growth due to strong demand for AI infrastructure and models. Baidu, Inc. (NASDAQ:BIDU)’s autonomous driving innovation, primarily Apollo Go, has been making significant strides toward commercial viability. It has been exploring numerous business models and partnerships to scale up robotaxi services.

Baidu, Inc. (NASDAQ:BIDU) focuses on making the ERNIE family of models affordable and efficient, enabling margin improvement and stable profitability. Moving forward, the primary tailwinds for growth include leadership positions in search engines, the addition of AI to it, and diversification in autonomous vehicles. Baidu, Inc. (NASDAQ:BIDU) aims to deploy 1,000 RT6 robotaxis in Wuhan by 2024 end. The company’s decade-long investment in AI seems to be paying off and should translate into long-term sustainable growth.

The transformative impact of Gen-AI and foundation models has been becoming more tangible. Across all the layers of its AI technology stack, and with the rapid adoption of applications built on top of ERNIE, Baidu, Inc. (NASDAQ:BIDU) has been scaling AI to address real-world problems.

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.”