BIDU entry $105; hold for return to $200
Updated
China stock Baidu is way down for the year and dipping this week on trade war news, but the company's earnings outlook has recently improved, with strong positive surprises on the last two quarterly reports. Based on analysts' revisions of the forecasts, I think this stock could see $200 per share again within the next two years. I should note, however, that December tends to be a bad month for Baidu, so rather than buy at the current price of $113, I suggest waiting to buy at the volume node at $105. (The average analyst price target is about $143.)
Note
This is probably my favorite investment thesis in the whole market right now. Baidu has been diversifying itself by investing in AI, streaming services, cloud services, etc., and the news is all good. Their streaming service iQiyi is being called the Netflix of China, and yesterday their Facemoji Keyboard and Simeji apps hit 40 million users.Note
So far, my BIDU trade is working out extremely well. Baidu's subsidiary IQ is worth a look today as well, with lots of bullish options interest in both stocks.Note
I am up about 10% on my original BIDU, and I remain so bullish on the stock that I've been adding more shares all the way up. Today it broke above a critical resistance level on news of a collaboration with Samsung to release a new AI chip next year.Note
BIDU is showing some green again on the daily chart, so I have re-entered here.
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