Which Chinese Big Tech Stock is Best?

In this piece, I evaluated two Chinese Big Tech stocks, Baidu (NASDAQ:BIDU), and Alibaba (NYSE:BABA), using TipRanks’ comparison tool to see which is better. A closer look suggests neutral views for both, although a clear winner emerges — in the event that the overhangs dissipate.

China-based Baidu is one of the largest AI and Internet companies in the world. On the other hand, China’s Alibaba specializes in e-commerce, retail, and Internet-based technologies. Although the two companies don’t compete directly, both are Big Tech companies based in China, with Baidu often described as “China’s Google” and Alibaba tagged as “China’s Amazon.”

Shares of Baidu are off 20% over the last year after a 13% drop over the last three months. In fact, Baidu stock plummeted 7% on Friday alone, its largest decline in more than a year (more on that below). Meanwhile, Alibaba stock has plunged 39% over the last year, including a 16% decline over the last three months.

Although the two companies’ one-year drops are dramatically different, their similar recent declines stem from concerns about China.

In recent months, U.S.-listed Chinese stocks, in general, have been falling due to worsening relations with China, as evidenced by the Invesco Golden Dragon China ETF (NASDAQ:PGJ). The ETF tracks the Nasdaq Golden Dragon Index of Chinese stocks listed in the U.S. and is down 23% over the last year and off 8% over the last three months.

Additionally, Goldman Sachs (NYSE:GS) said in early December that China and the broader emerging-Asia market were among the most-net-sold regions by hedge funds in November. In fact, Chinese equities recorded their fourth consecutive month of net outflows from long/short equity managers and the ninth month of net outflows overall in 2023.

As such, the many China-specific issues do play a critical role in the ratings for both companies, although a closer look at the company-specific factors suggests a clear winner.

Baidu (NASDAQ:BIDU)

At a…