Baidu Vs. Alibaba: Which Chinese Tech Giant Is A Better Buy?

Image Source: Baidu

Alibaba Group Holdings Limited (BABA - Get Rating) and Baidu, Inc. (BIDU - Get Rating) are two of the biggest Chinese tech giants. BABA is known as the ‘Amazon of China’ and operates through four major segments—Cloud Computing, Digital Media, Innovation, and Core Commerce. BIDU is a Chinese language Internet search provider that offers a Chinese language search platform on its website.

While many countries are still struggling to fully recover from the COVID-19 pandemic, China has recovered rapidly. Major Chinese tech giants are also making their presence felt in the global economy, but at the same time are facing increasing regulatory controls from Chinese authorities. However, since technological advancements are happening now on almost a regular basis, both BABA and BIDU should witness increasing demand for their products and services.

While BIDU has returned 114.4% over the past year, BABA has gained 13.9%. In terms of their past month’s performance, BIDU is a clear winner with 3.8% returns versus BABA’s 2.4%. But which of these two stocks is a better pick now? Let’s find out.

Latest Movement

This month BABA announced that it had suffered an Administrative Penalty Decision issued from the State Administration for Market Regulation of the People’s Republic of China after an anti-monopoly probe found the e-commerce giant had abused its dominant market position for several years. Alibaba accepted the penalty and said it will comply with the regulator’s determination. On April 26, 2021, affiliated companies Ant Group and Tencent both announced further cooperation with China’s central bank to move forward with the country’s digital yuan, vowing to provide active support to the currency’s rollout. 

Jidu Auto, an electric vehicle venture between BIDU and Chinese automaker Geely (GELYF), announced on April 23 that it aims to plow 50 billion yuan ($7.7 billion) into producing smart cars over the next five years. This should increase Baidu’s revenue margin significantly. Today, Baidu MEG unveiled its new X+Y strategy to advance intelligent search through “servitization” and “humanization”, and Baidu App announced a new brand slogan, “Baidu for a Better Life”, as part of its efforts to support content creators and developers deliver superior end-to-end experiences to users and diversify its income stream.

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