Top 10 ADR Stocks To Buy According to Hedge Funds - Insider Perspective
Number of Hedge Fund Holders: 48
Stock Upside Potential: 61.90%
Baidu, Inc. (NASDAQ:BIDU)
Baidu, Inc. (NASDAQ:BIDU) is one of the top 10 ADR stocks to buy, according to hedge funds, owing to the role it plays in China’s internet landscape. The company offers internet search services and generates a significant chunk of its revenues through advertising. While Baidu, Inc. (NASDAQ:BIDU) is best known for its search business, it is also diversifying its footprint as it seeks to become an artificial intelligence first business.
It’s already working on its large language model LLM ERNIE that is to leverage in its autonomous driving and robotaxis segments. The platform already handles 600 million requests daily. AI is expected to strengthen Baidu, Inc. (NASDAQ:BIDU)’s competitive edge while opening up new growth opportunities, especially on the cloud. For starters, the company is staring at opportunities around autonomous driving technology, with the segment expected to grow by 32% over the next six years.
Baidu, Inc. (NASDAQ:BIDU) delivered solid second-quarter results showing modest growth despite grappling with a slowing Chinese economy. Revenues in the quarter were flat at $4.67 billion, driven by 10% growth in non-online marketing revenue, mainly from A.I. Cloud.
Baidu, Inc. (NASDAQ:BIDU) is trading at an attractive valuation, with a forward P.E. ratio of 7.70, which is a 40% discount compared to the industry average of 12.91. Additionally, analysts rate the stock as Buy with an average price target of $138.89, implying a 61.90% upside potential from current levels.
Likewise, 48 out of 920 hedge funds tracked by Insider Monkey held stakes in the company as of the end of the first quarter. As of June 30, Citadel Investment Group is the top investor in the company and has a stake worth $151.24 million.
Here is what Ariel Global Fund said about Baidu, Inc. (NASDAQ:BIDU) in its first-quarter 2024 investor letter.
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