iQiyi (NASDAQ:IQ) stock is on many investors’ radar today due to a report by Reuters that Baidu (NASDAQ:BIDU) is in talks to sell its stake in the company. It would be a deal that could value iQiyi at a whopping $7 billion. Reuters cited four unnamed individuals as its sources for the story.

China based iQiyi specializes in online video streaming. It’s widely known as the “YouTube of China.” Baidu, another Chinese company, owns and operates the country’s largest internet search engine. It has a 53% stake in iQiyi .

Even after IQ stock soared nearly 20% yesterday, iQiyi’s market capitalization is only about $4 billion. That’s well below the possible $7 billion valuation that Baidu’s potential deal would reportedly give the company.

According to Reuters, “China’s online video market is booming,” while iQiyi is the second-leading player in the space.

Two Firms Upgraded IQ Stock in May

On May 26, Citi(NYSE:C) raised its rating on iQiyi from “neutral” to “buy.” The firm noted that the company had “turned profitable” in the first quarter, as reported by The Fly. The company, which reported Q1 earnings per share (EPS), excluding some items, of 3 cents, had not been expected to enter the black until the second quarter. Predicting that iQiyi would remain profitable throughout 2022, Citi raised its target on IQ stock from $4.50 to $5.60.

According to Reuters, at the $7 billion valuation that Baidu’s potential deal may give iQiyi, each share of IQ stock would be valued at roughly $8.13.

On May 27, research firm Benchmark raised its rating on IQ stock from “neutral” to “buy.” The firm said that it was “encouraged” by the company’s plans, its cost-cutting efforts. and a reduction in its competition. Benchmark kept a $7 price target on the name.

On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.