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Baidu (BIDU) Invests $200M in Neusoft, Expands AI Presence

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Baidu, Inc. (BIDU - Free Report) is leaving no stone unturned to bolster presence in the artificial intelligence (AI) space.

Reportedly, the ever-growing Chinese internet company plans to invest 1.44 billion yuan ($200 million) in an investment firm, Neusoft Holdings Co. Ltd.

Founded in 2011, Neusoft is an investment company focused on AI, cloud computing and big data services in those areas.

Though much details of the transaction have not yet been revealed, Baidu plans to work together in important growth areas namely smart cities, education services and healthcare. Per the deal, Baidu’s chief technology officer Wang Haifeng will join the board of Neusoft.

Baidu’s strategic motive behind the deal is to strengthen presence in AI and the cloud computing business.

Baidu, Inc. Price and Consensus

Baidu’s Continuous Efforts in AI Space

Baidu has been making continuous investments in companies affiliated with Neusoft Holdings.

In March, Baidu invested 22.5 million yuan in its subsidiary Neusoft Medical Systems, a provider of medical equipment manufacturer and cloud solutions. In June, Baidu partnered with Neusoft Group, a software unit of Neusoft Holdings, to develop AI technologies in healthcare and city management.

Baidu also invested in other companies to in a bid to ramp up its AI efforts. Just last month, Baidu teamed up with Chongqing team to accelerate the latter’s intelligent development of the municipality.

The recent deal is a win-win situation for both the companies. The partnership will help the companies in developing new products and strengthening their AI capabilities in growing areas.

Bottom Line

AI techniques have gained immense traction over the past couple of years due to massive demand for analyzing unstructured data such as tweets, social-media posts, photos and videos across different industries.

This partnership underscores Baidu’s growing interest in this highly promising space. It appears that the company is flexing its muscles in this space to leverage the concept of consumer convenience, in a bid to impress both customers and investors.

Zacks Rank and Stocks to Consider

Baidu currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Alphabet Inc. (GOOGL - Free Report) , Itron, Inc. (ITRI - Free Report) and MACOM Technology Solutions Holdings, Inc. (MTSI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth for Alphabet, Itron and MACOM Technology is currently projected at 17.5%, 25% and 15%, respectively.

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