Alibaba Vs Baidu: Which Chinese Tech Stock is the Better Buy Now?

In a swing of events, investor sentiment has shifted toward Chinese tech stocks in recent weeks, with Alibaba BABA and Baidu BIDU standing out in particular. This shift comes as a downturn in U.S. equities has been attributed to President Trump's tariffs, which have been aimed at traditional trade allies such as Canada and Mexico, outside of adversaries like China.Boosting and providing an edge to Alibaba and Baidu, is there artificial intelligence expansion, which has gained steam and notoriety following the announcement of China-based DeepSeek’s advancement in AI at a more affordable cost. AI Models With DeepSeek being a private company, Alibaba has taken the show in public markets by unveiling its new AI reasoning model, QwQ-32B. Like Amazon AMZN, Alibaba’s AI expansion is another bid to boost its market dominance with both having diversified business endeavors outside of e-commerce.    Similarly, Baidu has leveraged its AI efforts as the largest search engine provider in China, a step that Alphabet GOOGL is swiftly perusing in the U.S. Notably, Baidu will be launching an upgraded version of its AI assistant, “Ernie” this month, which is similar to Alphabet’s Google Gemini.   Recent Performance Comparison to U.S. Counterparts Echoing the swoon in investor sentiment from U.S. tech stocks to those of China, Alibaba stock has soared over +60% year to date with Baidu shares up a very respectable +12%. In comparison, Amazon and Alphabet shares have fallen 10% and 13%, respectively, with the broader indexes for U.S. markets in negative territory as well.Image Source: Zacks Investment Research Outlook Comparison & EPS Revisions In regards to their outlook, Alibaba’s top line is expected to rise 6% in fiscal 2025 and FY26 with projections edging toward $147 billion in annual sales. Furthermore, Alibaba’s annual earnings are currently slated to increase 2% this year and are projected to spike another 23% in FY26 to $10.83 per share. More intriguing, over the last 30 days, FY25 EPS estimates have risen 1% with FY26 EPS estimates up 6%.  Image Source: Zacks Investment Research Pivoting to Baidu, total sales are slated to increase 1% in FY25 and are forecasted to rise another 4% next year to $19.52 billion. On the bottom line, Baidu’s EPS is expected to be down 9% in FY25 but is projected to rebound and jump 16% in FY26 to $11.17. In the last month, Alibaba’s FY25 and FY26 EPS estimates are up 4%, respectively.Image Source: Zacks Investment Research BABA & BIDU Valuation ComparisonDespite a very sharp YTD rally to around $140, Alibaba stock still trades at a reasonable 15X forward earnings multiple with Baidu shares at $94 and 9.6X. In comparison, Amazon and Alphabet are at 30.7X and 18.6X forward earnings, respectively.Image Source: Zacks Investment Research Bottom Line Although Baidu’s cheaper valuation may stand out more, its stock lands a Zacks Rank #2 (Buy) with Alibaba sporting a Zacks Rank #1 (Strong Buy). Given the trend of positive earnings estimate revisions, both should have more upside with the uptick in FY26 EPS estimates and a more attractive growth trajectory standing out for Alibaba in the wake of its new AI reasoning model.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Baidu, Inc. (BIDU): Free Stock Analysis Report Alibaba Group Holding Limited (BABA): Free Stock Analysis Report Amazon.com, Inc. (AMZN): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks