Baidu Inc. (BIDU) shares took a significant hit on Tuesday, plummeting by over 6.7% to $106.75. This decline mirrored a broader downturn in U.S.-listed Chinese stocks, triggered by disappointment over China’s economic stimulus plans. The Hang Seng Index, a major benchmark for Hong Kong stocks, plunged over 9% – its worst single-day performance since 2008 – reflecting investor anxieties over a potential economic slowdown.
The sell-off was fueled by the National Development and Reform Commission (NDRC), China’s top economic planning body, failing to deliver the ambitious fiscal measures many had anticipated. Investors were expecting sweeping initiatives to stimulate consumption, boost infrastructure spending, and issue new bonds to support economic growth. Instead, the NDRC announced relatively modest measures, including a 100 billion yuan ($14.1 billion) budget for 2025 construction projects, significantly below what many hoped for.
This muted response triggered a wave of profit-taking, with investors cashing in on gains following weeks of strong market performance. Baidu, a leading force in internet search, AI, and autonomous driving technologies, was particularly hard hit by the selloff. As a company heavily invested in China’s technological advancements, Baidu’s fortunes are closely tied to the health of the Chinese economy.
The company’s expansion into AI services, including Baidu Cloud and its autonomous driving platform Apollo, hinges on sustained economic growth. However, without a robust fiscal boost, concerns about slower economic growth are rising. These concerns could negatively impact corporate spending on AI and cloud services, as well as consumer demand for autonomous driving technologies.
Adding to the pressure on Baidu is the broader sell-off in Chinese tech stocks, including giants like Tencent and Alibaba. These companies, like Baidu, have significant foreign ownership, making them more susceptible to shifts in market sentiment and economic forecasts. The lack of stimulus from Beijing has raised doubts about the strength of the ongoing economic recovery, leading to a sharp decline in tech sector valuations.
Investors seeking to invest in Baidu can access its shares through brokerage platforms or by investing in exchange-traded funds (ETFs) that hold Baidu shares. They can also consider allocating a portion of their retirement savings to strategies that invest in mutual funds or other instruments holding Baidu stock.
Baidu’s 52-week high stands at $135.85, while its 52-week low sits at $79.68, according to data from Benzinga Pro.
