For a while, it wasn’t shaping up to be a good day for Chinese stocks, and Chinese tech stocks in particular. Many of them were in the red going into Tuesday’s trading, though many of the biggest names have rallied. And it all seems to trace back to one of the biggest usual suspects when it comes to sudden stock movement: earnings reports.
Baidu (NASDAQ:BIDU) and iQiyi (NASDAQ:IQ) posted their earnings results and, for the most part, did quite well. Baidu posted beats for both earnings and revenue, with its earnings coming in at $2.34 against projections calling for $1.76. Revenue came in at $4.54 billion, which is not only nicely above projected figures of $4.31 billion but also up 1.3% against this time last year. As for iQiyi, it posted earnings of $0.14, which beat projections of $0.09, and its revenue of $1.2 billion not only beat the $1.15 billion called for by analysts but was also 9.1% above this time last year.
Considering this, it was odd that Baidu notched up over 4.3% in Tuesday afternoon’s trading while iQiyi plunged over 8.6%. Meanwhile, other major Chinese stocks started down but turned up fractionally into Tuesday’s trading. Alibaba (NASDAQ:BABA) added over half a percent after being down around 1% in the morning, and JD.com (NASDAQ:JD) saw something similar happen through the afternoon. Even Pinduoduo (NASDAQ:PDD) lost ground in the morning but recovered to a fractional gain.
All five stocks are considered a Strong Buy by analyst consensus. And though iQiyi was the biggest loser so far today, it also offers the best upside potential of any of the five; iQiyi offers 72.5% upside thanks to its average price target of $9.41. Meanwhile, Baidu made the biggest gains today but has the lowest upside potential of 43.76%, thanks to its average price target of $191.46.