Baidu is trading near new highs and is among the top stocks in the Relative Strength At New High list of IBD Stock Screener.
The RS screen finds growth stocks with relative strength lines hitting new highs while building a base or breaking out. The new highs are often spotted as a blue dot in MarketSmith pattern recognition on daily and weekly charts.
Baidu Increases AI Exposure
Beijing-based Baidu is an internet search provider that uses artificial intelligence in its search function and other businesses. The company is expanding its AI businesses using "Baidu Brain" technology, with its Ernie chat bot in recent focus.
Seventy percent of Baidu's revenue comes from Baidu Core, which consists of mobile apps, AI cloud services and self-driving technology.
Over 1 billion users access Baidu's products every month.
Stock Screener Finds Internet Search Stock
Baidu is one of 35 growth stocks that made the Relative Strength At New High stock screener on Wednesday.
The stock's daily and weekly relative strength lines made new highs. Shares are in an undefined base and nearing the 160.98 buy point.
BIDU pulled back on news the company canceled its public demonstration of the Ernie chat bot on Friday.
Shares rebounded Tuesday after Chinese stocks rose in sympathy as Chinese e-commerce giant Alibaba rose sharply, and on subsiding concerns of the banking crisis.
Meanwhile, Loop Capital raised its price target to 215 from 167 and maintained its buy rating on the stock.
Why Baidu Got Flagged
Baidu dipped following its fourth-quarter earnings release Feb. 22, despite a beat on both earnings and sales.
Shares traded choppy after the report, moving above then below the 50-day moving average. But news of Alibaba's chatbot and autonomous-driving service was released, giving shares a lift on March 16. BIDU stock rose 3.8% in heavy volume, bumping up against the 50-day line.
The following day, Baidu announced it became the first provider allowed to run a fully driverless robo-taxi service in Beijing. Shares gapped up 6.3% in heavy volume on the news, pushing BIDU back above the 50-day line.
Baidu Stock Leaves Others In The Dust
BIDU holds a 92 Relative Strength Rating. The rating has strengthened from 86 four weeks ago.
Leading up to the current base, Baidu stock made a strong prior uptrend. Shares have gained more than 37% this year so far, well outpacing the 13% gain of the Nasdaq composite.
While quarterly earnings growth has improved, revenue growth has been declining.
Baidu posted Q4 EPS growth of 21%, accelerating from 4% and a dip of 1% in the prior two quarters. Revenue declined for three straight quarters vs. the prior year, a flaw to monitor.
Baidu holds the top spot out of 77 stocks in the Internet-Content industry group. The group rose to 28th place out of the 197 IBD industry groups, from 98th four weeks ago.
Follow Kimberley Koenig for more stock news on Twitter @IBD_KKoenig.
