Starting a journey in the stock market doesn’t always necessitate a hefty bank account. Even a modest $200 can spark a prudent investment. Astute investors recognize the prowess of growth stocks, promising substantial returns over time.
Delve into the realm of artificial intelligence (AI) with two compelling stocks priced under $200 each. Witness their promising trajectories as AI continues its dazzling evolution.
Unveiling the Enigmatic Baidu
Meet Baidu (BIDU), a pioneering tech juggernaut in China. Emerging in 2000, Baidu has transcended its origins as a mere search engine to become an empire in the tech sphere. Its ascent coincided with the rapid bloom of China’s internet landscape. Baidu’s intuitive interface, coupled with its profound understanding of Chinese language and culture, captured the intrigue of investors.
Baidu has diversified its offerings to encompass online advertising, cloud computing, and AI. Despite a 13.3% dip year-to-date, contrasting with the S&P 500 Index’s 9.3% climb, Baidu’s allure endures.
Statista reports Baidu’s dominance, commanding approximately 62% of China’s search engine market as of April 2024. The company’s foray into intelligent driving is gaining momentum, with its autonomous ride-hailing service, Apollo Go, witnessing a 49% surge in rides in the final quarter.
Dive deeper, and you’ll find Baidu’s total revenues spiking by 6% in Q4 2023. Adjusted diluted earnings per share surged by an impressive 43%, with the full-year figures posting an 8.8% revenue hike and a staggering 37.2% leap in earnings. CFO Rong Luo’s statement underlines Baidu’s unwavering commitment to enhancing operational efficiencies and nurturing high-quality growth in 2024.
Amidst forecasts predicting a 7% revenue upswing in 2024 alongside a 2.9% earnings drop, 2025 shines with an anticipated revenue and earnings growth of 7.8% and 10% respectively. Wall Street’s resounding endorsement of BIDU stock as a “strong buy” emerges from the analysis of 16 experts. With a mean price target of $165.25, a 60.2% upside beckons investors. Priced at a modest nine times forward 2024 earnings, Baidu stands as a judicious bet in the AI arena.
The Awe-Inspiring Alphabet
Enter the tech titan, Alphabet (GOOGL), captivating enthusiasts with its dynamic growth narrative and innovative forays. Fueled by AI, Alphabet is witnessing exponential expansion, alluring investors with its potential.
Over the years, Alphabet’s stock has witnessed meteoric growth, propelled by Google’s unrivaled advertising empire, robust cloud computing services, and more. Notably, the stock skyrocketed by a remarkable 483% over the past decade.
With a commendable 11.7% surge year-to-date, surpassing Nasdaq Composite’s 9.8% ascent, Alphabet’s allure remains unwavering.
Google Search’s global supremacy, commanding almost 92% of the market, raked in $175 billion in 2023, marking an 8% annual upsurge. Google Cloud revenue surged by 26% year-over-year to $33 billion in the same year, establishing a formidable presence in the cloud computing domain.
Alphabet’s dalliance with AI saw the launch of Gemini AI to counter OpenAI’s ChatGPT. Despite temporary setbacks, analysts like Daniel Ives from Wedbush believe in Google’s latent potential in the AI landscape, overshadowed by the Gemini turbulence.
Flush with $110.9 billion in cash and equivalents at the close of Q4, among other financial indicators, Alphabet’s projected 2024 revenue and earnings upticks of 11.0% and 16.8% respectively underscore its growth potential. Trading at 22 times forward 2024 earnings, Alphabet emerges as a compelling hyper-growth AI prospect.
Market sentiment echoes optimism, with 35 out of 44 analysts recommending a “strong buy” for Alphabet stock. The average price target of $163.33 foresees a 4.7% upside, with a high estimate of $180 signaling a potential 15.4% surge in the next 12 months.
Despite regulatory hurdles and cutthroat competition in the AI domain, Alphabet cements its status as a premier tech investment. The journey ahead appears promising, making Alphabet a strong buy in the current landscape.
Disclosure: On the date of publication, Sushree Mohanty did not hold any positions in the securities mentioned. The content is for informational purposes only. Refer to the Barchart Disclosure Policy for more details.
The views expressed are solely those of the author and do not necessarily align with those of Nasdaq, Inc.
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