|Bid||108.63 x 1000|
|Ask||108.75 x 800|
|Day's Range||108.26 - 109.10|
|52 Week Range||93.39 - 234.88|
|Beta (3Y Monthly)||1.63|
|PE Ratio (TTM)||8.48|
|Earnings Date||Oct 28, 2019 - Nov 1, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||147.04|
The cup with handle chart pattern is to serious investors what the single is to a baseball fan. It's the starting point for scoring runs.
(Bloomberg) -- Sign up for Next China, a weekly email on where the nation stands now and where it's going next.For decades, NetEase Inc. has been the perennial runner-up to the likes of Tencent Holdings Ltd. in China’s evolving internet landscape. Now it’s betting on a bookish computer scientist to catapult it to the top of the class in the nation’s $36 billion online education market.Zhou Feng, chief executive officer of NetEase Youdao, is charged with helping NetEase escape from under Tencent’s enormous shadow and find life beyond video games. The U.S.-trained software coder handpicked by billionaire founder William Ding Lei is creating an all-in-one learning platform to tap the lucrative space where education and technology overlap. To bankroll that expansion, the company could float Youdao, last valued at $1.1 billion, as soon as this year.Zhou is counting on a decades-old custom. Every summer, millions of Chinese high school students sit through a grueling two-day college entrance exam, or gaokao, that helps determine the course of their lives. That’s why China’s tiger moms and dads have long sent their kids from as early as kindergarten age to private tutoring classes for English, math and sciences.Intense competition has fueled an education boom, particularly targeting the K-12 group that includes students from kindergarten through high school, creating a coterie of multi-billion-dollar corporations. Leading players like New Oriental Education & Technology Group Inc. and TAL Education Group that still rely mainly on in-class teaching have gone public in the U.S. and seen their shares soar. Online startups such as the Tencent-backed VIPKid are still trying to convince parents that digital instruction can be as good, if not better than brick-and-mortar classrooms.Through combining content with the latest technology, Zhou sees a business chance for Youdao, whose name loosely translates to “there’s a way”. Courses can be taught through high-speed live-streaming, enabling smooth communication between teacher and student. Artificial intelligence-powered “tutors” can grade homework and use data to evaluate student test results, he said.“That’s what we have always been good at,” said Zhou, 40, a University of California at Berkeley alumnus with a penchant for blending English words into conversations. “Almost every industry in China has been transformed by the internet, but that’s not yet the case for education.”Revenue for China’s online education market is estimated to have reached around 252 billion yuan ($35.7 billion) in 2018, and is expected to more than double in 2022, with 264 million paying users, according to iResearch.But there’s yet to be a clear winner -- even for top tuition providers like New Oriental, its digital arm Koolearn in 2017 only accounted for less than 1% of the total revenue in the local online teaching market, according to Frost & Sullivan data cited in its prospectus. What sets Youdao apart is its exclusive focus on online and its expansion into education-related hardware. It has launched a slew of products from apps for note-taking and children’s stories to smart devices like a 799 yuan electronic dictionary pen, which allows students to scan printed text and translate it instantaneously.“NetEase’s technology support and the company’s online DNA and roots should make its products more sophisticated than traditional education providers,” said Bloomberg Intelligence analyst Vey-Sern Ling. Still, not having physical classrooms means it could be difficult for Youdao to expand beyond structured, standardized learning or test prep, he said.NetEase could do with a win. Founder and CEO Ding has a master plan for China’s second largest game developer to delve into three sectors including e-commerce, music streaming and online education, but the result is best described as mixed. Its music arm has grappled with rising content costs, as it has to sublicense a large chunk of songs from its much bigger rival, Tencent Music Entertainment Group. Although e-commerce has grown to become NetEase’s largest division after gaming in terms of revenue, it sold its popular import platform Kaola to Alibaba Group Holding Ltd. in a $2 billion deal.That magnifies the importance of Youdao and its leader, with whom Ding shares a long history. Back in 2004, when Zhou was pursuing his doctorate degree in computer science, NetEase’s CEO came across his paper on filtering junk emails, and, ironically, shot him a message that was mistaken as spam. It had no body text but just a subject line: “I’m Ding Lei, I have a technical question for you.”The two eventually got in touch via phone calls, and Zhou worked part-time for NetEase for three years. After earning his doctorate in 2007, he officially joined the company as lead architect for Youdao in Beijing, which at the time was trying to morph from a digital dictionary into a web search engine. To challenge the local leader Baidu Inc., Youdao’s approach was to operate a slew of vertical search services at one time, in everything from news to blogs to maps.Those efforts failed, and in 2012 Zhou decided to close the search operation. “That was when we hit our lowest point,” he said. Zhou shifted the 400-person team to develop learning apps instead.Youdao’s revenue rose 60% in 2018 from a year earlier, while sales for K-12 courses increased three-fold in the same period, he said. Online courses have surpassed advertising as Youdao’s largest income stream, Zhou said.Now of the nearly 2,000 employees Zhou oversees at Youdao, half are teachers and other staffers dedicated to building up its online class portfolio. “Learning is much more difficult than playing video games,” he said.To contact the reporter on this story: Zheping Huang in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- The China-U.S. trade war threatens to upend the supply chains of multinational technology companies. But smaller businesses are also getting caught up in the dispute.U.S. startups seeking funding must now consider relations between Beijing and Washington. According to one, that means turning away from Chinese investors and overseas cash in general in favor of raising money in the U.S. It could also accelerate the need to go public, according to Ripcord Inc. founder Alex Fielding.“Would I say that there was any risk from any investment that we took from a Chinese fund? No. I think they’re all great investors. It’s good money from good people and banks that are well known. This isn’t terrorist money,” he said. “Is there risk to Ripcord as a company for taking it? There is now.”Ripcord, which uses robots and artificial intelligence to scan and classify paper documents, previously got financing from sources including the venture capital arms of Chinese search leader Baidu Inc. and Beijing-based conglomerate Legend Holdings Corp. Now Fielding is looking for new investment to help the Hayward, California-based startup expand overseas. The trade war stands in his way.Instead of expanding to China and raising more money there, Ripcord’s first international move is to enter Japan via a new branch in Tokyo that will work with a large bank. And Fielding is eyeing cash from U.S. strategic investors with the ability to commit more in further rounds as needed. That should give Ripcord more time to grow before turning to public markets, he said.Decisions like this are part of the reason Chinese investment in U.S. startups is falling. There have been 25 rounds with at least one China-based investor so far in the third quarter, down from a peak of 67 in the second quarter of 2018, according to market tracker Preqin.Ripcord, whose clients include Coca-Cola Co., has carved out a niche by digitizing information on paper so it can be loaded into corporate data bases. Its 30,000-square-foot-factory space in the San Francisco Bay area houses giant machines that the startup builds itself. Ripcord has the equipment made domestically by U.S. companies. That’s more expensive than outsourcing to Asia, but more prudent in this new environment, he said.The problem with a greater association with China is that the U.S. administration could decide to classify a Ripcord investor or partner as a security risk, which could be fatal for the startup, according to Fielding.“There’s a lot of companies that are probably in that boat, weighing: Do we take a local investment that’ll cost us more than a foreign investment when there’s risk that comes with that?” he said. “It was never a part of the narrative, and now it is.”For Ripcord, Fielding believes the extra maneuvering will be worth it because he sees such a big opportunity. About 49 trillion sheets of paper are printed annually. Ripcord has scanned hundreds of millions of sheets this year and will pass 1 billion sheets next year.To contact the reporter on this story: Ian King in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Jillian Ward at email@example.com, Alistair Barr, Mark MilianFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Multinational Chinese tech company Baidu has taken proactive steps to counter market uncertainty. It has plans to expand into areas of emerging technology.
The challenges facing Chinese streaming video play iQiyi (NASDAQ:IQ) are myriad, and they've pressured IQ stock.Source: natmac stock / Shutterstock.com iQiyi stock has rallied so far this year, gaining 21%, but it's faded of late. Those gains, meanwhile, are coming after the stock hit an all-time low in late 2018.In recent months, at a cheaper price, I've come around to the bull case for IQ stock. In June, I called it the best play for those still bullish on China long-term.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThat's not to say the risks weren't, and aren't, significant. The Chinese economy continues to struggle amid a trade war with the U.S. Competition is intense, most notably from Tencent (OTCMKTS:TCEHY) and Alibaba (NYSE:BABA) unit Youku Toudo. iQiyi still is burning cash as it grows. Majority owner Baidu (NASDAQ:BIDU) is struggling, leading to the possibility of further sales of iQiyi stock.iQiyi's second-quarter report last month seems to highlight, if not increase, those risks. Investors largely have shrugged off the report, as IQ stock trades above where it did before the release. * 10 Stocks to Sell in Market-Cursed September But on this site, Luke Lango argued the report wasn't enough, and I'm inclined to agree. iQiyi still has an intriguing long-term case, but the near-term risk to IQ stock seems to be rising. Growth Slows, but IQ Stock Holds UpFrom a headline standpoint, iQiyi's second-quarter earnings report looks close to disastrous. Revenue growth decelerated dramatically. In Q1, revenue in yuan increased by 43% year-over-year. Growth in Q2 was just 15%.To be fair, there's a key culprit outside of the company's control: the Chinese macroeconomic environment. Advertising revenue declined 16% year-over-year in the second quarter, after a ~flat performance on the same basis in Q1. CEO Tim Gong Yu noted that "a lot of advertisers constrained their advertising budgets," on the Q2 conference call.In the subscription business, iQiyi generated new members toward the end of the quarter thanks to new content. And so membership revenue increased just 38% despite a 50% increase in the quarter-end subscriber count.Both factors are understandable, and indeed the 15% increase was in line with Street estimates. That said, Q3 guidance for revenue growth of just 4-10% suggests a further decline in the top-line growth rate.At the same time, iQiyi's spending isn't going anywhere. Operating loss widened by over 40% year-over-year. Content costs increased by just 7%, but selling and marketing expenses both rose sharply.Perhaps surprisingly, investors saw the quarter as reasonably in line: iQiyi stock only fell 1% the following day. It may be that 50% subscriber growth and decent performance in a tough environment was good enough, particularly given the fact that IQ stock had slid heading into the release. The Risks to iQiyi StockThat said, there are some concerns in the report upon closer inspection. One, in particular, is the fact that subscriber growth came in toward the end of the quarter. As management noted, that boost came as the content was released, which itself is a bit of a concern.The worry is that iQiyi essentially can't stop spending on content, or else subscriber growth slows or stops. It's an echo of the worry facing Netflix (NASDAQ:NFLX), to which iQiyi is often, and somewhat incorrectly, compared.The bullish case for both stocks is that building out a content library with upfront spending will result in enormous cash flow down the line, as that content is monetized. If, however, consumers come to expect more and better content in perpetuity, the hamster wheel never stops spinning. The correlation between content spend and subscriber growth thus is somewhat discomfiting, even at this early stage in iQiyi's growth.The other concern is on the advertising front. Macro weakness is a headwind, to be sure. But iQiyi management also noted an increase in the supply of online advertising inventory, which is pressuring pricing.That's a big risk. Price reductions come off the operating profit line at almost 100%. And the combination of higher inventory and macro concerns suggests ad revenues can be pressured into 2020 at least. Investors hoping for near-term profitability may have to wait longer than they expected. Dented, but Not BrokenTo be sure, Q2 earnings don't break the case for IQ stock. Investors in U.S. markets seem reasonably content with the idea that Chinese companies may struggle for a few quarters. The long-term opportunity, however, still remains.That's true for iQiyi as well. That said, it's hard not to see near- to mid-term risk rising after the second-quarter report. This still is a company with a market cap of over $13 billion, no profitability, and decelerating growth. That's usually a recipe for disaster.Add in the underlying concerns in both the subscription and advertising businesses, and IQ stock at least seems like a candidate for a decline when broad markets stumble. And if Q3 shows further revenue deceleration and wider losses, it may not take a market sell-off for iQiyi stock to start falling again.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post Things Look Precarious for IQ Stock Post Q2 Earnings Disappointment appeared first on InvestorPlace.
Baidu (BIDU) plans to invest 1.44 billion yuan ($200 million) in an AI company, Neusoft Holdings. The move is likely to further expand Baidu's presence in this space.
The stock market is a "what have you done for me lately" business. I believe that's the situation that Nvidia Corporation (NASDAQ:NVDA) finds itself in. In an economy that is becoming increasingly immersed in artificial intelligence (AI), the question that investors might be wondering is "what's next?"Source: michelmond / Shutterstock.com Since 2016, NVDA has started to look like a high-flying growth stock and not a fairly predictable semiconductor company. But the market has a way of finding equilibrium and that may very well be the case for Nvidia stock. The Market Already Recognizes NVDA as a Leader in AIBack in May of 2017, many people including InvestorPlace contributor Larry Ramer were saying that Nvidia stock, which was up about 200% for the year at the time, was already pricing in the benefit of the AI revolution. Yet in 2018, NVDA stock exploded to over $286 per share in October of 2018.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe reason for this, in large part, was the need for Nvidia's chips to power the mining of cryptocurrency. But cryptocurrency is a volatile business. And when the crypto bubble burst, the air went out of Nvidia stock as well. Shares plummeted over 50% by January of this year. * 10 Stocks to Sell in Market-Cursed September Now they're climbing again. Nvidia stock has gained over 30% since the end of May to its current price of $182.52 per share. Some of that gain is due to its most recent earnings report. In August, NVDA reported a better-than-expected earnings per share, and a slight gain in revenue. China Remains a Big Story for NvidiaAnother reason for the explosive growth in NVDA stock in 2018 was demand from China. It's no secret that the U.S. and China are racing to show leadership in the AI space. In July 2017, Nvidia and Baidu (NASDAQ:BIDU) announced a partnership that would allow Baidu to use Nvidia's technology for cloud computing service, self-driving vehicles, and AI home assistants.But since the onset of the trade war with China, analysts are wondering if NVDA will lose access to this all-important market. And if they do, will there be avenues to replace it? NVDA Is Moving Deeper into the IoT SpaceThis summer, Nvidia announced that it is the first AI platform to train BERT (one of the most advanced AI language models) in less than an hour and complete AI interference in just over 2 milliseconds. Companies recognize the significance of this breakthrough as they use real-time conversational AI to engage more naturally with customers. This means that hundreds of developers worldwide will use NVDA's AI platform to advance their own language understanding research and create new services.This initiative alone will seed the company more deeply into the growing Internet of Things (IoT) space. If estimates are correct, IoT revenue will top $373 billion in 2020 and hardware, like the kind Nvidia provides, will account for 52% of those sales.This came after Nvidia's announced partnership in April of 2018 in which ARM will use Nvidia's open-source Deep Learning Accelerator (NVDLA) in its Project Trillium platform. Last month I wrote that this may not sound like a big revenue generator for NVDA in the short-term. However, it helps Nvidia create an ecosystem that will drive more revenue through its data centers. The Bottom Line on Nvidia StockPrior to 2016, Nvidia was a semiconductor stock doing the things that semiconductor stocks do. It didn't move too high or too low. It was predictable. Then AI came along and NVDA has become feted like a tech darling as investors rushed to get in on the "next new thing".I'm not down on Nvidia stock. The company is a legitimate leader in the technology that is fueling AI applications. But if the equity was looking overvalued at $140, it certainly seems to be overvalued at $180. That's especially so since the consensus price estimate is $189.Buy Nvidia for what it is - a semiconductor company. But don't pay a price for Nvidia stock based on its current valuation with the expectation that it has a high ceiling: at least not right away. The AI revolution is not going away, but not every application or every company will be successful. Nvidia is just one link in the chain. And their success is dependent on others being able to deliver on their promises.As of this writing, Chris Markoch did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post With Obvious Catalysts Priced In, Whatas Next for Nvidia Stock? appeared first on InvestorPlace.
Moody's Investors Service ("Moody's") assigned a B2 Corporate Family Rating (CFR) and B2-PD Probability of Default Rating (PDR) to Cerence LLC ("Cerence") in connection with the company's expected spin-off from, Nuance Communications, Inc. ("Nuance" Ba3, Stable), and Cerence's concurrent proposed debt financing. Cerence's proposed $425 million senior secured term loan B and $75 million revolving credit facility were assigned ratings of B2, in line with the CFR.
Investing in stocks comes with the risk that the share price will fall. And there's no doubt that Baidu, Inc...
iQiyi (NASDAQ:IQ) is China's leading streaming service. It's attracting investors because it is delivering viewers. In fact, over the next two years some analysts project iQiyi's user growth will climb 6.7% to 738 million. Average revenue per user is also expected to climb 8.3% to $17.60 per user.Source: Faizal Ramli / Shutterstock.com This number raises the question of practical growth versus numerical growth. However, in the short term, more users should provide a nice tailwind for IQ stock. But I'm not so sure that iQiyi has the right business model for long-term growth. iQiyi is like Netflix if Netflix Were Owned by AlphabetThe most important caveat when discussing iQiyi is that it is a subsidiary of Baidu (NASDAQ:BIDU), China's leading search engine. iQiyi is seen as a key source of revenue for Baidu (which still owns 58% of IQ) as it attempts to halt a steep skid in its own stock price. So whenever you talk about iQiyi making over 70% from advertising revenue you have to remember that it's Baidu that's generating that revenue.InvestorPlace - Stock Market News, Stock Advice & Trading TipsiQiyi on the other hand makes its revenue through sales of its subscription services and content marketing. Proponents of IQ stock will say that iQiyi currently has about one-half of the Chinese market. But even with only half the market, it still has more users than Netflix (NASDAQ:NFLX). Plus, by keeping subscription costs very low (approximately $3 in U.S. terms), it will have no problem capturing more of the Chinese market. Do Chinese Consumers Really Love Ads?There are U.S. companies (e.g. Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Facebook (NASDAQ:FB)) that rely on advertising revenue. But that business model is starting to come under attack. Consumers are more aware than ever that the advertising content they receive comes at the expense of their personal privacy. This conflict is being played out in the stocks as investors wrestle with what companies such as Facebook look like with falling advertising revenue. * 7 Stocks to Buy In a Flat Market I have to believe that iQiyi will be facing the same issues. The theory is that China is the leader in e-commerce so it stands to reason that Chinese consumers will be drawn to advertising like a moth to a flame. However, viewing habits in China don't seem to support this theory. A report by digital brand researcher L2 cited that the streaming habits of Chinese consumers revolve around live-streaming events that resemble the QVC network. One of the reasons why Chinese consumers are attracted to this format is because there is no hard sell. It's part infomercial, part reality TV and keeps them more engaged.This isn't to say that iQiyi doesn't have a large user base, but it does suggest that Chinese consumers are not going to pay more for content that includes advertising. They go elsewhere for that. iQiyi Can't Afford to Be NetflixNetflix subscribers pay between $10-$16 for a subscription. With that subscription, they get exactly what they want - - the potential for hours upon hours of uninterrupted viewing. But even though Netflix, which started out as a home delivery service for DVDs, has evolved its business model to incorporate original content, it is still facing two emerging threats. First, original content costs a lot to produce. Second, the two most popular shows on Netflix, "The Office" and "Friends," will no longer be available on the service after 2020.IQ by contrast can afford to keep the price of their subscription low because of Baidu. However, perhaps recognizing the need to give Chinese consumers more variety, iQiyi is still taking on the expense of producing original content. This creates a math problem.Netflix is struggling to remain profitable while charging between three and five times what iQiyi charges their customers. So where is the profit going to come from for iQiyi? Advertising will only take it so far. Eventually, no many how many viewers they deliver, advertisers will expect a return on their investment. But Chinese viewers are already skeptical of traditional advertising, so I'm not sure how that model works long term. The Bottom Line for IQ StockIt wouldn't surprise me if IQ stock rises in the short term as the company expands its user base. However, as much as IQ wants to position itself as the Chinese version of Netflix, investors will need to see a profit and consumers may want to see commercial-free viewing.That presents iQiyi with a trap that I just can't square with long-term success.As of this writing, Chris Markoch did not hold any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 3 Artificial Intelligence Stocks to Buy * 7 Industrial Stocks to Buy for a Strong U.S. Economy * 3 Beaten-Down Bank Stocks to Buy and Hold for the Long Term The post The Numbers Don't Add Up for IQiyi Stock appeared first on InvestorPlace.
Tech stocks have been wealth creators for a few decades now. In this article, we analyze tech stocks that should be on the radar of contrarian investors.
[Editor's note: "5 Futuristic Artificial Intelligence Stocks to Buy" was previously published in July 2019. It has since been updated to include the most relevant information available.]Before we know it, AI will be part of our everyday lives. Market experts say artificial intelligence will lead the next wave of economic growth and productivity for at least the next couple of decades. But many AI stocks have earned a cautious outlook from the Street.We all know the up and downsides of stocks like Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD) and Tesla Inc (NASDAQ:TSLA), but their challenges are separate from some other heavily AI-influenced stocks.InvestorPlace - Stock Market News, Stock Advice & Trading TipsTo find the best investing opportunities in AI right now, we looked for five stocks with a "strong buy" or "moderate buy" consensus rating from the Street's top analysts. These are analysts with the highest success rate and average return. By limiting the ratings to best-performing analysts, we cut out analysts with poor track records to find recommendations investors can trust. * Dorian's Impact on the Markets Stocks with "strong buy" ratings are also more likely to have significant upside potential from the current share price. Salesforce (CRM)When cloud computing giant Salesforce.com (NYSE:CRM) launched its Einstein Analytics platform back in 2017, everyone was buzzing. "We have more customer data than ever before and we need AI to turn data into something actionable for the business user," says CRM exec Arijit Sengupta.Salesforce wants a slice of the fast-growing AI market. A report by IDC and commissioned by CRM found that AI technologies will create more than 800,000 new jobs and add $1.1 trillion to global GDP by 2021.CRM also has a very strong outlook from the Street. Microsoft (MSFT)Microsoft (NASDAQ:MSFT) acquired Canadian AI company Maluuba as its primary entrance into the AI fray. Maluuba teaches machines to think and ask questions through deep learning. You may have heard of Maluuba when it made the impossible possible and used AI to beat the notoriously difficult Ms. Pac-Man arcade video game.Microsoft CEO Satya Nadella says he wants to "democratize AI" and bring the technology to more industries such as healthcare, education and manufacturing. * Dorian's Impact on the Markets After taking a bit of a beating at the end of 2018, Microsoft has surpassed its previous highs. Alphabet (GOOGL)Alphabet Inc (NASDAQ:GOOGL) has made the most AI purchases out of any tech firm, calculated research firm Quid, which shows that GOOG has made 20 AI acquisitions, including predictive analytics platform Kaggle in Q1 2017 alone.Google CEO Sundar Pichai long has spoken about Google's "AI first" future. At Google's developer conference, he showed the Google Lens (a camera that can recognize what it sees) and AutoML. AutoML uses neural networks to build better neural networks, essentially creating an AI that can create itself.Google is rife with "buy" ratings and very few sell or hold ratings, and it has meaningful upside. Baidu (BIDU)Chinese internet company Baidu Inc (ADR) (NASDAQ:BIDU), the "Google of China", has been investing heavily in AI. It thinks artificial intelligence can give it an edge over local rivals Tencent Holdings Ltd. (OTCMKTS:TCEHY) and Alibaba Group Holdings Ltd (NYSE:BABA).Baidu spent $2.9 billion on R&D in just 2.5 years, with most of this going to AI. The money has funded a 1,700-member research team and four separate research labs. Crucially, Baidu has an AI advantage because of the huge data it gains from its 665 million monthly search engine users. * Dorian's Impact on the Markets BIDU is a moderate buy with the trade war dragging on, but it still has impressive upside potential. Delphi Automotive (DLPH)U.K.-based auto tech company Delphi Automotive (NYSE:DLPH) is on the rise after a tumultuous few months.Delphi dropped its powertrain business to focus on self-driving cars and electric vehicles last year, which appears to finally be paying off. In partnership with BMW, Intel Corporation (NASDAQ:INTC) and Mobileye NV, Delphi plans to launch self-driving cars by 2021.Which stocks have a strong buy rating in the sector that interests you?TipRanks tracks and ranks over 4,500 analysts from eight different market sectors. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Deeply Discounted Energy Stocks to Buy * 7 Stocks to Buy In a Flat Market * 10 Stocks to Buy to Ride China's Emerging Wealth The post 5 Futuristic Artificial Intelligence Stocks to Buy appeared first on InvestorPlace.
(Bloomberg) -- Alibaba Group Holding Ltd. bought NetEase Inc.’s Kaola e-commerce platform for about $2 billion and invested in its music streaming service, forging a rare partnership between two of China’s largest internet giants.The deal hands Alibaba the biggest Chinese online marketplace for foreign brands after its own Tmall Import and Export. Kaola will now operate independently but under new Chief Executive Officer Alvin Liu, a Tmall veteran. Separately, Alibaba and billionaire co-founder Jack Ma’s Yunfeng Capital will invest $700 million in NetEase Cloud Music. NetEase remains the controlling shareholder of its music app.Alibaba and NetEase -- both based in the prosperous eastern city of Hangzhou -- have long fought social media titan Tencent Holdings Ltd. across several fronts but the landscape is shifting. The emergence of Tencent-backed rivals like Pinduoduo Inc. is testing Alibaba’s dominance of retail. NetEase has long been a distant runner-up to Tencent in gaming and now also music streaming, while Alibaba has its own music app Xiami. The sale of the low-margin Kaola platform now allows NetEase to focus on its bread-and-butter gaming business.“NetEase can further optimize its costs while Alibaba strengthens its leadership in cross-border e-commerce,” Thomas Chong and Ken Chong, analysts at Jefferies, wrote Friday. “On the other hand, we believe NetEase Cloud Music can benefit from potential synergies with the Alibaba ecosystem.”Read more: Tencent Music Dives as Watchdog Probes Its Record-Label TiesThe Kaola deal creates a dominant bazaar for consumers seeking foreign labels and goods. Alibaba and Kaola, which is loss-making on an operational level, controlled almost 60% of all transactions on China-based platforms for foreign brands in the second quarter, according to research firm Analysys.It also deepens a seeming alliance. NetEase founder William Ding and Alibaba CEO Daniel Zhang exchanged good-natured banter during a long TV interview aired in China just last month. Asked about their rivalry, Ding joked: “Many of our employees might be husbands and wives.”What Bloomberg Intelligence saysAlibaba’s $2 billion acquisition of Kaola, NetEase’s cross-border e-commerce platform, will make it the go-to channel for Chinese consumers seeking high-quality foreign products.\-- Vey-Sern Ling and Tiffany Tam, analysts-- Click here for the researchThe investment will prove welcome to NetEase, which like Alibaba has grappled with rising content costs.NetEase Music most recently raised $600 million in November when Baidu Inc., General Atlantic and Boyu Capital participated in a fundraising round. The latest capital injection comes after China’s antitrust authority launched a probe into its much larger rival, Tencent Music Entertainment Group, over its licensing practices. Under government pressure, Tencent Music and NetEase Music last year agreed to relicense more than 99% of their music catalogs to each other.“What really matters is the 1% exclusive content,” said Shawn Yang, a Shenzhen-based analyst with Blue Lotus. “Now that NetEase has new funding that can be used to buy copyrights, it will definitely be a threat to TME.”(Updates with analysts’ comments in the fourth paragraph)To contact the reporter on this story: Zheping Huang in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.