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Baidu (BIDU - Free Report) stock jumped on Tuesday after the tech giant, Chinese version of Google, breezed past analysts’ earnings expectations. Baidu reported revenues of 34.1 billion yuan ($4.7 billion) versus 33.28 billion yuan or $4.66 billion expected. Earnings per American Depositary Share on a non-GAAP basis were 22.55 yuan, versus 15.79 yuan in the year-ago period. The stock jumped about 4% in the pre-market trading session on Aug 22, 2023.
“In the second quarter of 2023, Baidu Core accelerated revenue and profit growth, driven by the solid performance of online marketing business and operating leverage,” said Robin Li, Co-founder and CEO of Baidu, said in a release. “Generative AI and large language models hold immense transformative power in numerous industries, presenting a significant market opportunity for us,” he added.
Baidu last week also unveiled an AI-powered assistant that could assist user with tasks including booking meetings, air tickets and hotels. However, it is still unclear ow users could obtain the assistant product. The company is also looking to expand the reach of AI into the automobile sector.
Baidu also operates self-driving taxis under the Apollo Go brand in China. In the second quarter, Baidu said it ran roughly 714,000 robotaxi rides, up from 660,000 in the first quarter. The company was allowed to start charging fares for public robotaxi rides in Beijing in November 2021. Passengers can book the rides, which are typically highly subsidized, via an app.
The stock has a Zacks Rank #3 (Hold). Moreover, the stock has a Upbeat Value and Momentum score of “A” and also very good Growth score of “B.” Against this backdrop, below we highlight a few Baidu-heavy ETFs that can gain on following the earnings release.
The underlying NASDAQ Golden Dragon China Index is currently comprised of 38 U.S. exchange-listed stocks of companies that derive a majority of their revenues from the Peoples Republic of China. The fund has an asset base of $175.4 million. Baidu takes the third spot in the fund with about 7.51% exposure. The fund charges 70 bps in fees.
Roundhill Generative AI & Technology ETF (CHAT - Free Report)
The Roundhill Generative AI & Technology ETF is an actively-managed fund designed to provide exposure to companies involved in the investment theme of artificial intelligence, generative artificial intelligence and related technologies. The 36-stock fund charges 75 bps in fees. Baidu takes the fifth spot in the fund with about 5.48% exposure.
The underlying Solactive Social Media Index is designed to reflect the performance of companies involved in the social media industry, including companies that provide social networking, file sharing, and other web-based media applications. Baidu takes about 5.08% weight of the fund. The 50-stock fund charges 65 bps in fees.
Global X Emerging Markets Internet & E-commerce ETF
The underlying Nasdaq CTA Emerging Markets Internet & E-commerce Net Total Return Index provides exposure to exchange-listed companies that are expected to benefit from further adoption of internet and e-commerce technologies in emerging markets countries. Baidu takes 3.86% of the fund. The 47-stock fund charges 65 bps in fees.
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Baidu Pops on Earnings Strength: ETFs to Benefit
Baidu (BIDU - Free Report) stock jumped on Tuesday after the tech giant, Chinese version of Google, breezed past analysts’ earnings expectations. Baidu reported revenues of 34.1 billion yuan ($4.7 billion) versus 33.28 billion yuan or $4.66 billion expected. Earnings per American Depositary Share on a non-GAAP basis were 22.55 yuan, versus 15.79 yuan in the year-ago period. The stock jumped about 4% in the pre-market trading session on Aug 22, 2023.
“In the second quarter of 2023, Baidu Core accelerated revenue and profit growth, driven by the solid performance of online marketing business and operating leverage,” said Robin Li, Co-founder and CEO of Baidu, said in a release. “Generative AI and large language models hold immense transformative power in numerous industries, presenting a significant market opportunity for us,” he added.
Baidu last week also unveiled an AI-powered assistant that could assist user with tasks including booking meetings, air tickets and hotels. However, it is still unclear ow users could obtain the assistant product. The company is also looking to expand the reach of AI into the automobile sector.
Baidu also operates self-driving taxis under the Apollo Go brand in China. In the second quarter, Baidu said it ran roughly 714,000 robotaxi rides, up from 660,000 in the first quarter. The company was allowed to start charging fares for public robotaxi rides in Beijing in November 2021. Passengers can book the rides, which are typically highly subsidized, via an app.
The stock has a Zacks Rank #3 (Hold). Moreover, the stock has a Upbeat Value and Momentum score of “A” and also very good Growth score of “B.” Against this backdrop, below we highlight a few Baidu-heavy ETFs that can gain on following the earnings release.
ETFs in Focus
Invesco Golden Dragon China ETF (PGJ - Free Report)
The underlying NASDAQ Golden Dragon China Index is currently comprised of 38 U.S. exchange-listed stocks of companies that derive a majority of their revenues from the Peoples Republic of China. The fund has an asset base of $175.4 million. Baidu takes the third spot in the fund with about 7.51% exposure. The fund charges 70 bps in fees.
Roundhill Generative AI & Technology ETF (CHAT - Free Report)
The Roundhill Generative AI & Technology ETF is an actively-managed fund designed to provide exposure to companies involved in the investment theme of artificial intelligence, generative artificial intelligence and related technologies. The 36-stock fund charges 75 bps in fees. Baidu takes the fifth spot in the fund with about 5.48% exposure.
Global X Social Media ETF (SOCL - Free Report)
The underlying Solactive Social Media Index is designed to reflect the performance of companies involved in the social media industry, including companies that provide social networking, file sharing, and other web-based media applications. Baidu takes about 5.08% weight of the fund. The 50-stock fund charges 65 bps in fees.
Global X Emerging Markets Internet & E-commerce ETF
The underlying Nasdaq CTA Emerging Markets Internet & E-commerce Net Total Return Index provides exposure to exchange-listed companies that are expected to benefit from further adoption of internet and e-commerce technologies in emerging markets countries. Baidu takes 3.86% of the fund. The 47-stock fund charges 65 bps in fees.