The uh created tremendous number of problems and our portfolios are all about solving problems. Kathy wood, the ceo and cio of oregon vest has been known for her outrageous price targets on tesla. Yet, behind the popularity of her bet on tesla, she has also made numerous successful investments in stocks such as square roku, invitee and many more now kathy seems to have found an enticing investment that he sees a lot of potential in over the past couple of weeks. Kathy wood, the ceo and ceo of arc, invest has been making massive purchases into one stock in total, kathy wood's purchase totals to 185 million dollars which signals that she's confident in the growing company in this video i'm going to go over.

What kathy wood's huge bet is and whether you should buy into this stock with massive potential welcome to cash gains academy, if you're new to the channel, please consider subscribing for more content like this and let's get right into it instead of waiting until the end. To mention the name of the stock we're going to get right into it. The stock that kathy wood has been purchasing is baidu. Now before you have preconceived notions or searches stock up.

Let me explain why cathy, what is purchasing baidu stock and why, personally, i've invested over 15 percent of my portfolio into the stock baidu is about to enter an enormous market and is still valued as if the company won't grow significantly. This video will have five parts. First, we'll start off with an overview of baidu's business. Second, the potential of baidu's entrance into a large market.

Next, why kathy would believe spidey will 2x or more after that baidu's valuations and why the stock is undervalued and, lastly, whether the stock is buy right now, with that out of the way, let's get right into it. Baidu's name speaks for itself, as in chinese. Baidu means a hundred times: the company runs many different platforms in the technology. Space, most notable is baidu search engine often times baidu is regarded as the google of china in china.

Government regulations make it difficult for foreign companies to operate normally, while google dominates the us and europe baidu dominates china. In 2010, when google attempted to enter the chinese market, google had a repeated cyber attacks and is eventually banned in mainland china. On march 30th, 2010.. It's safe to say that bailey will continue to dominate the chinese market due to its government support.

Additionally, as we've seen with google baidu's competitive mode of having enormous amounts of data prevents other search engines from catching up. Baidu also owns baidu maps, which is a mapping service, baidu bike, which is an online encyclopedia baidu wing pan, which is a cloud storage service in bairdu utiba, which is a discussion forum. What should be looked at closely in that list is baidu wingpan. The ai cloud sector is not a very large market in china right now, but is projected to grow significantly over the next few years.

Between 2018 and 2024, the idc or the international data corporation estimates that the ai cloud services market in china will grow 93.6 per year 93.6 on an annual basis is not something to overlook. This annual growth rate will continue to compound the market size over time by 2024. The ai cloud services market is estimated to be at 4.5 billion dollars and that's just in china. The leading company in this growing market is, as you might have guessed baidu in december of 2019.

Baidu actually took the lead against microsoft and google in an ai natural language, processing competition names, g-l-u-e baidu also owns a company named aichi, which is looks to as a netflix of china. Ichi alone is worth 16.5 billion dollars, even though aichi has been facing competition from tencent video. The company is still projected to grow its revenues by 10 in 2020 and 13 in 2021. It's no secret that the video streaming sector is accelerating in china and baidu is projected to take a portion of that pie.

Additionally, the baidu search engine is just going to continue growing in advertisement. Revenue as more people in the rural areas in china continue to adopt new technologies. Yet we haven't even hit on the large sector that baidu plays a major role in which is autonomous, driving and electric vehicles. Baidu's apollo go, which is baidu's autonomous driving service has been expanding in china and winning support from china's authorities.

In fact, baidu's apollo go was the first robo taxi service to open in beijing, and that's only the start of much more in august of 2020 baidu expanded its robo taxi pilot from changsha to changzhou and is now operating in over 20 cities in china and california. While you could argue about baidu, not being the best in autonomous driving, the winner of the autonomous driving race in china ultimately comes down to who the authorities approve of as the winner. According to arkhanvest, the chinese government has already designated baidu as a nation's autonomous driving platform. The pilot launch speaks for itself.

First to use it you'll start with the long dominating baidu maps, which is where you're going to order your robo taxi ride. Then you're going to use your phone to scan the qr code that is attached to the back of the front seat. The vehicle will now drive on its own to the destination. In the video i'm showing here, the rider was able to have the vehicle drive to its destination, with no interventions from the driver.

This is, of course, a geo-fenced area, but the fact that bayou has the ability to launch robo taxis in certain areas is quite appealing. Over the long term, we should see baidu begin to steadily roll out its autonomous driving service. The worst case scenario i see is that by these ride-hailing service fails and baidu sells this data to google for a huge price tag. The data that baidu is obtaining through its pilot ride-hailing services are extremely valuable to other companies like waymo and without a doubt, would be purchased for a significant amount of money.

Yet baidu's ambitions go even further from there. In 2019, baidu partnered with chinese state-owned carmaker faw group to launch the hong chi ev ai-powered taxi. The vehicle is the first mass-produced robot taxi in china. After this baidu is officially announced that it is developing an electric vehicle in an exclusive reuters report.

Baidu stated that it was talking with other automakers to develop a smart car. The company is considering contract manufacturing a vehicle similar to how neo is partnered with jsc motors, as we've seen with neo, the company has had major success in the electric vehicle space while supplying batteries through jsc and using catl batteries. This leads me to conclude that baidu's entrance in the evs has tremendous potential. Baidu has had preliminary talks with gili, which owns volvo guangzhou automobile group, also known as gac, and the faw group hongqi reuters has reported that baidu does have a strategic partnership with gac and further crew operation is being discussed.

We all know how much potential an electric vehicle would have for baidu through the use of baidu's autonomous driving data, the company's massive cash balance of 33 billion dollars in its lead in internet data. Baidu easily has the potential to release a compelling electric vehicle. Kathy would have stated that she will not buy a stock unless it has potential to have the stock price go up 15 every year in a five year span. That equates to above a 2x return.

In fact, it's evident that kathy wood is still building a position. Baidu and has not even finished buying in yet because she's not done buying into baidu. Yet we haven't gotten that many statements from kathy wood herself. Nevertheless, arkhanvest did release one report on baidu in august of 2020 written by tasha keaney in the report.

Kini cited that baidu's apollo go was improving at a fast rate and was an incredible step to fully autonomous taxis. Since we know that cathy wood has been buying into baidu recently and not the previous years, it becomes clear that there are three main factors to kathy's purchases of baidu stock. These three factors are baidu's apollo, go baidu's entrance into electric vehicles and the company's appealing valuation. When it comes to apollo go, we know that developments have only accelerated rapidly in recent times.

On the other hand, baidu's eevee development was even more recent. On december 15th, 2020 reuters reported that bailey was looking into electric vehicles. On the same day, katie made the largest purchase in the baidu as she purchased over 470 000 shares. This shows the facts that kathy sees potential in baidu's eevee sector and by the way, when i mention kathy, i really mean the entire arc, invest which kathy wood is the ceo and cio of the last reason for kathy's purchases in the baidu is the valuation, as I'm recording this video baidu trades for 190.

A share, you might think 190 dollars. A share is overvalued when you consider that baidu is up 53 in the past 12 months. Nonetheless, a closer look shows that baidu is actually extremely undervalued. The industry average for forward pde ratios in baidu's case is 31.

today, baidu trades at just a 16 pde ratio. This means that after the next 12 months, assuming that earnings projections are correct and that the current stock price stays the same, baidu would have a trailing pde ratio of 16. that right there is incredibly undervalued and minimizes the downside risk to investing in baidu. For the long term, one of the reasons why baidu's four pde ratio is so low is because of the fact that baidu search engine had huge growth slowdown to just 2 per year in 2020.

Additionally, ichigi was expected to grow faster, but has faced competition from tencent video. These factors and a few others lead baidu stock to only have gone up 28 since april of 2011 and actually be down in a five-year span. Despite its stock price staying flat over the past decade, baidu is projected to have its revenue growth 15 in 2021.. This is similar to tesla's seven years of trading sideways before the massive breakout in 2020., as kathy wood says the longer the base, the bigger the breakout.

This trading around this trading range you as a trader, an investor, but i as a trader also understand that when you build a base like that, one of two things is going to happen. It's either going to break down and that's what a lot of the bears have been. Betting on and they've been using ever throwing everything at it or it's going to break out. Clearly, we believe is going to break out and the longer the base.

You say five years. The longer the base you know is that the bigger the breakout, so we're really looking forward to that in baidu's case, the breakout likely doesn't have as much potential as tesla, because the short interest is quite low, but the stock is worth looking into in my opinion. So, what's the conclusion, in my opinion, baidu is a buy for the long term because of its valuation and massive growth opportunities ahead of it. However, i'm not a financial advisor and i'm simply just an investor reflecting his thoughts about baidu.

You should always do your own research, i'm interested in hearing your thoughts about baidu. Let me know whether you are interested into buying baidu stock. Do you think baidu will dominate the ai, autonomous driving or ev sector, or do you think body will run into major barriers? If you enjoyed this video, please hit the like button and subscribe and i'll see you in the next one.