On Dec. 30, Baidu stock rose by 12.6 percent, while the S&P 500 rose by 0.1 percent. The stock was up $24.56 from its previous closing price of $195.07 on a volume of 25,183,464 shares. Over the past year, the S&P 500 has risen by 15.5 percent, while Baidu stock has gained 73.8 percent. Is Baidu stock a buy or sell at this price?
On Dec. 30, Baidu stock surged significantly after the European Union and Chinese leaders finalized the terms of a historic investment deal. The new investment deal will likely facilitate cross-border investment and increase international trade between China and the European Union. The deal still needs to be reviewed before it gets signed.
Baidu faces privacy issues
In November, two apps developed by Baidu leaked sensitive user data. The two apps, Baidu App and Baidu Maps, were removed from the Google Play store after researchers revealed privacy issues in the software.
Baidu on Stocktwits
Baidu stock has become a major talking point on social media platforms. An investor named Scared_Money_Team on Stocktwits thinks that Baidu stock can surge to $500 by the end of 2021 and to $1,000 within the next three years. The investor highlighted that the company will likely benefit from its Apollo Go Robotaxi services in China.
The cloud industry will likely surge by 93 percent due to demand in China. Baidu receives nearly 80 percent of its traffic from search engines in China. Google has been banned in China since 2010. The investor added that Baidu is entering the electric vehicle industry.
Baidu doesn’t pay dividends
Currently, Baidu doesn’t pay dividends.
Baidu’s stock forecast
As of 7:19 a.m. ET in pre-market trading on Dec. 31, Baidu stock was up by about 3.7 percent at $227.73. The stock has risen by 13.6 percent in the last five days and by 73.8 percent in the last year. The stock is trading 0.4 percent below its 52-week high of $220.60 and 167.8 percent above its 52-week low of $82.
According to estimates compiled by CNN, analysts' median target price is $1,169 for Baidu, which is 432.3 percent above its current stock price. Among the 38 analysts tracking Baidu, 29 recommend a buy, nine recommend a hold, and none recommend a sell. The highest target price of $1,634 is 644.2 percent above the stock's current price, while the lowest target price of $979 is 346.2 percent above the stock's current price.
Baidu stock looks like a buy
Baidu stock looks like a buy based on its strong growth outlook. The company’s profit will likely grow by double-digits over the next few years. In the fourth quarter, the company expects its sales to grow by 4 percent at the midpoint, which suggests that the worst is over for Baidu. In the third quarter, the company's sales rose by 1 percent YoY to $4.2 billion.
Baidu plans to manufacture its own electric cars. The company is looking forward to partnering with a local automaker to produce electric vehicles.