2024-07-08 08:30:00 ET
Summary
- Despite being a leading AI player, Baidu's stock is trading at multi-year lows amidst negative macroeconomic headlines and elevated regulatory risks in China.
- Baidu's improving business trends, strong cash flow generation, and massive GenAI potential make it a compelling long-term investment.
- With a fair value estimate of $196 per share and potential for significant upside, Baidu is a truly asymmetric risk/reward bet at current levels.
Introduction
With China experiencing outright deflation and a painful bear market, most investors have thrown in the towel on Chinese equities - some even labeling China an "uninvestable" market. Now, while I acknowledge the heightened macroeconomic and regulatory risks associated with investing in China, the second-largest economy on the face of this planet is here to stay. Economic cycles always turn, and it will do so again in China at some point in the future....
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For further details see:
Baidu: An Opportunity Of A Lifetime Or A Tragic Mistake