Market Overview

Why Chinese Player Baidu Inc Became A Market Leader


Baidu Inc (NASDAQ: BIDU) is known as the Chinese Google. That comparison alone tells you this company is a powerhouse. The key thing to understand is that China has over 1.3 billion people while the United States has only 313 million. If Google has a valuation of $372 billion, why can't BIDU have a valuation 4X greater? Right now BIDU has a market cap of $53 billion. This is the mentality that has driven investors to buy this stock. Anyone betting on best of breed in China is betting on BIDU.

Having said that, considering the latest economic woes of China, my bet will be that investors can buy BIDU much cheaper than the current levels. $114 will be the first spot my toes dip into the buy BIDU water. The stock is currently sitting at $151.47 per share. Stocks are not so much a good gauge of reality, instead they gauge emotion. Euphoria and fear are the driving forces. With the stock market making a top in this vicinity, fear will soon take over and push a majority of stocks much lower. Cheers!

Gareth Soloway

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.


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