Last Updated on October 28, 2022 by Mathew Diekhake
Many US asset managers are highly recommending Telsa at $206 since it has declined from its peak at $401. And it may well provide decent returns for investors, but its Chinese competitor Baidu is a better buy.
Many investors have lost confidence in Chinese stocks since president Biden added new sanctions on China that prevented them from using American semiconductor and AI technology starting in 2023. This has left many Chinese stocks having to either create the technology themselves or look elsewhere for new suppliers.
And it may well prove that China does already have a company capable of providing that AI technology which is Baidu. Baidu uses an affiliate company for its semiconductor chips called Kunlun. Baidu also has partnerships with Samsung for AI technology. Baidu has already started rolling out robotaxis in China, so we know it has already produced chips capable of powering robotaxi vehicles.
Tesla after selling off to $206 has a forward P/E ratio of 37.57. Baidu on the other hand after selling off to $92.54 has a forward P/E ratio of 1.41. Given that Baidu isn’t all that insecure about semiconductors and AI technology, this makes it look like the much more appealing buy today.
Baidu currently has a Buy rating on Zacks. Zacks gives Baidu an A for its Value score and a B for its VGM score.
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