BA BAIDU Baidu, Inc. Loading... BIDU : Investor Sentiment and Bull/Bear Views

Lists $BIDU as a stock he owns and says he believes it is undervalued or at a generational bottom.

The author argues Baidu looks optically cheap with about $41B in cash and investments plus 50% AI cloud revenue growth, but AI cloud is the real problem because it consumes heavy capital spending; free cash flow fell from +$1.9B in 2024 to an annualized –$3.3B in H1 2026, with roughly $3.9B of the decline from higher capex. At $85.33 per ADS, the author calculates a 10% annual return requires about $137 in five years, which only works if AI cloud turns growth into cash within two to three years; otherwise the downside is roughly $33–49 per ADS, a 40–60% loss. The main stated risk is that AI cloud could improve faster than expected, and the author would revisit if annualized capex falls below $4.5B, operating cash flow improves for two straight quarters, and online marketing declines less than 10% year over year.

The author holds BIDU at a -65% loss and argues China is at a painful inflection point where ADR stocks do not perform well in uncertain times. The causal mechanism is macro uncertainty in China depressing ADR valuations. No specific catalyst or time horizon is given, and the main risk is a China recovery that lifts ADRs.