Baidu Shares Plunge 28.9% Year to Date: Time to Sell the Stock?

Zacks12-05

Baidu BIDU, China's leading AI company, finds itself in increasingly troubled waters as its shares have plunged 28.9% year to date, underperforming the Zacks Computer and Technology sector’s growth of...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2489463610?lang=en_US&edition=fundamental","thumbnail":"https://s.yimg.com/uu/api/res/1.2/uN.CRU9NYRI78Xh..I_Dmw--~B/aD00MDA7dz02MzU7YXBwaWQ9eXRhY2h5b24-/https://media.zenfs.com/en/zacks.com/19e025edc67d0231b408370725a10f26","is_english":true,"pubTime":"2024-12-05 21:14","share_image_url":"https://static.laohu8.com/5f26f4a48f9cb3e29be4d71d3ba8c038","id":"2489463610","market":"us","top_or_hot":-1,"title":"Baidu Shares Plunge 28.9% Year to Date: Time to Sell the Stock?","media":"Zacks","content":"<div>\n<p>Baidu BIDU, China's leading AI company, finds itself in increasingly troubled waters as its shares have plunged 28.9% year to date, underperforming the Zacks Computer and Technology sector’s growth of...</p>\n\n<a href=\"https://finance.yahoo.com/news/baidu-shares-plunge-28-9-131400437.html\">Source Link</a>\n\n</div>\n","source":"yahoofinance","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Baidu Shares Plunge 28.9% Year to Date: Time to Sell the Stock?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nBaidu Shares Plunge 28.9% Year to Date: Time to Sell the Stock?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-12-05 21:14 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/baidu-shares-plunge-28-9-131400437.html><strong>Zacks</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Baidu BIDU, China's leading AI company, finds itself in increasingly troubled waters as its shares have plunged 28.9% year to date, underperforming the Zacks Computer and Technology sector’s growth of...</p>\n\n<a href=\"https://finance.yahoo.com/news/baidu-shares-plunge-28-9-131400437.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU1823568750.SGD","symbol_name":"Fidelity Global Technology A-ACC SGD","start_time":0,"source_url":"https://finance.yahoo.com/news/baidu-shares-plunge-28-9-131400437.html","article_id":"2489463610","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/uN.CRU9NYRI78Xh..I_Dmw--~B/aD00MDA7dz02MzU7YXBwaWQ9eXRhY2h5b24-/https://media.zenfs.com/en/zacks.com/19e025edc67d0231b408370725a10f26"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2489463610","pubTimestamp":1733404440,"columns":[],"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Baidu BIDU, China's leading AI company, finds itself in increasingly troubled waters as its shares have plunged 28.9% year to date, underperforming the Zacks Computer and Technology sector’s growth of 30.6%. This has raised significant concerns about the company’s growth trajectory and market positioning.BIDU's latest financial results for third-quarter 2024 paint a concerning picture, with total revenues declining 3% year over year to RMB 33.6 billion , signaling persistent weakness across multiple business segments and challenging the company's narrative of AI-driven transformation.The company's flagship Baidu Core segment posted flat revenue growth, reflecting ongoing struggles in its online marketing business. While management attempts to paint a positive picture through growth in AI Cloud revenues, which rose 11% year over year, this increase has proven insufficient to offset broader weaknesses in the company's traditional revenue streams. The online marketing segment, which remai","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU1823568750.SGD":"Fidelity Global Technology A-ACC SGD","BK4558":"双十一","LU1267930227.SGD":"TEMPLETON GLOBAL BALANCED \"AS\" (SGD) ACC A","BK4587":"ChatGPT概念","LU1115378108.SGD":"Eastspring Investments - Global Emerging Markets Dynamic AS SGD","BK4535":"淡马锡持仓","BK4524":"宅经济概念","LU0128525689.USD":"TEMPLETON GLOBAL BALANCED \"A\"(USD) ACC","BK4527":"明星科技股","BK4538":"云计算","09988":"阿里巴巴-W","LU1105468828.SGD":"Allianz Total Return Asian Equity AM DIS H2-SGD","LU0067412154.USD":"UBS (LUX) EQUITY FUND -  CHINA OPPORTUNITY \"P\" (USD) ACC","BK4579":"人工智能","BK4588":"碎股","BK4526":"热门中概股","LU0501845795.SGD":"瑞银大中华区股票基金P Acc SGD","LU1152091754.HKD":"UBS (LUX) EQUITY FUND - CHINA OPPORTUNITY (USD) \"PM\" (HKD) INC","BABA":"阿里巴巴","LU0348814723.USD":"ALLIANZ TOTAL RETURN ASIAN EQUITY \"A\" (USD) INC  NC","LU1048596156.SGD":"Blackrock Asian Growth Leaders A2 SGD-H","BK4122":"互联网与直销零售","LU1282648689.USD":"ALLIANZ TOTAL RETURN ASIAN EQUITY \"AMG\" (USD) INC","LU0821914370.USD":"贝莱德亚洲成长领袖A2","LU0287142896.SGD":"Fidelity China Focus A-SGD","LU0797268264.HKD":"ALLIANZ TOTAL RETURN ASIAN EQUITY \"AT\" (HKD) ACC","LU1152091168.USD":"UBS (LUX) EQUITY FUND - CHINA OPPORTUNITY (USD) \"PM\" INC","BK4581":"高盛持仓","TCEHY":"腾讯控股ADR","BIDU":"百度","LU0651946864.USD":"贝莱德新兴市场股票收益A2","LU0918141887.USD":"安联亚洲实际收益股票基金","BK4548":"巴美列捷福持仓","LU1880383366.USD":"东方汇理中国股票基金 A2 (C)","BK4565":"NFT概念","LU0359201612.USD":"贝莱德中国基金A2","LU1008478684.HKD":"UBS (LUX) EQUITY FUND -  CHINA OPPORTUNITY \"P\" (HKD) ACC","LU0359202008.SGD":"Blackrock China Fund A2 SGD-H","LU0348816934.USD":"ALLIANZ TOTAL RETURN ASIAN EQUITY \"AT\" (USD)","LU1046422090.SGD":"Fidelity Pacific A-SGD","LU1023057109.AUD":"BGF CHINA \"A2\" (AUDHDG) ACC","LU0251143458.SGD":"Fidelity Emerging Markets A-SGD","LU1515016050.SGD":"Blackrock Emerging Markets Equity Income A6 SGD-H","LU0880133367.SGD":"UBS (LUX) EQUITY FUND CHINA OPPORTUNITY USD \"P\" (SGD) ACC","BK4531":"中概回港概念","LU0052756011.USD":"TEMPLETON GLOBAL BALANCED \"A\" (USD) INC","BK4534":"瑞士信贷持仓","BK4585":"ETF&股票定投概念","LU2226246903.HKD":"ALLIANZ TOTAL RETURN ASIAN EQUITY \"AT4\" (HKD) ACC","BK4533":"AQR资本管理(全球第二大对冲基金)"},"translate_title":"百度股价今年迄今暴跌28.9%：是时候出售股票了吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BABA":1,"TCEHY":1,"BIDU":1,"09988":0.6},"content_text":"Baidu BIDU, China's leading AI company, finds itself in increasingly troubled waters as its shares have plunged 28.9% year to date, underperforming the Zacks Computer and Technology sector’s growth of 30.6%. This has raised significant concerns about the company’s growth trajectory and market positioning. BIDU's latest financial results for third-quarter 2024 paint a concerning picture, with total revenues declining 3% year over year to RMB 33.6 billion ($4.78 billion), signaling persistent weakness across multiple business segments and challenging the company's narrative of AI-driven transformation.\nShare-Price Movement\nImage Source: Zacks Investment Research\nCore Business Weakness Persists\nThe company's flagship Baidu Core segment posted flat revenue growth, reflecting ongoing struggles in its online marketing business. While management attempts to paint a positive picture through growth in AI Cloud revenues, which rose 11% year over year, this increase has proven insufficient to offset broader weaknesses in the company's traditional revenue streams. The online marketing segment, which remains Baidu's primary revenue driver, saw a troubling 4% decline to RMB 18.8 billion ($2.68 billion), highlighting the company's vulnerability to macroeconomic headwinds and changing market dynamics.\nAI Investments: High Costs, Uncertain Returns\nDespite Baidu's aggressive push into artificial intelligence, with its ERNIE platform now handling approximately 1.5 billion API calls daily (up from 600 million in August), the financial impact of these investments remains questionable. The company's AI Cloud business, while growing, still represents a relatively small portion of overall revenues at RMB 4.9 billion, and the substantial R&D investments required for AI development continue to pressure margins. While the company touts improvements in its AI infrastructure and increased API calls, these metrics have yet to translate into meaningful financial returns for shareholders.\nAutonomous Driving: Growth Concerns and Regulatory Hurdles\nBaidu's autonomous driving segment, while technologically impressive, faces significant challenges in achieving commercial viability. While the company celebrated reaching eight million cumulative rides with its Apollo Go autonomous ride-hailing service and increased its fully driverless operations to 80% in October, the business model's profitability remains unproven. The service provided 988,000 rides in third-quarter 2024, representing a 20% year-over-year increase, but this growth rate appears to be decelerating compared to previous quarters. Moreover, regulatory uncertainties surrounding autonomous driving in China could further complicate expansion plans and delay meaningful revenue generation from this segment.\nFinancial Health Shows Mounting Pressure\nThe company's cost structure remains a significant concern for investors. Cost of revenues increased 1% year over year to RMB 16.4 billion, primarily due to rising traffic acquisition costs and AI Cloud-related expenses. While management emphasizes cost control measures, with operating expenses decreasing 5% year over year to RMB 11.2 billion, operating margins remain under pressure. The company's free cash flow declined to RMB 2.6 billion ($376 million), raising questions about its ability to sustain high levels of investment in emerging technologies while maintaining profitability.The Zacks Consensus Estimate for 2024 is pegged at $18.59 billion, indicating a year-over-year decline of 1.5%. The consensus mark for 2024 earnings is pegged at $10.16 per share. The earnings estimates have moved south by 2% over the past 30 days, indicating caution.\nImage Source: Zacks Investment Research\nStay up-to-date with all quarterly releases: See Zacks Earnings Calendar.\nInvestment Thesis: Time to Sell\nGiven Baidu's significant year-to-date share price decline and persistent operational challenges, investors should seriously consider reducing their exposure to the stock. Several compelling factors support this bearish outlook, including the core online marketing business which continues to struggle, with no clear catalyst for near-term recovery and ongoing macroeconomic headwinds in China. AI investments, while technologically promising, have yet to translate into meaningful revenue growth or profitability improvements. Regulatory uncertainties surrounding autonomous driving could limit growth potential and delay commercialization. Management changes and uncertain leadership dynamics add risk to the company's execution capabilitiesWhile Baidu maintains a strong cash position of RMB 144.5 billion ($20.59 billion) and trades at a discount with a forward 12-month P/S ratio of 51.54x compared with the Zacks Internet - Services industry average of 6.08x, the company's inability to return to meaningful growth, combined with increasing competition in the AI space and an uncertain regulatory environment, suggests that shareholders might face further downside risk. The company's focus on long-term AI development, while strategically sound, may continue to pressure near-term financial performance and stock price appreciation.\nBIDU’s P/S F12M Ratio Depicts Discounted Valuation\nImage Source: Zacks Investment Research\nBaidu's competitive landscape appears increasingly challenging as tech giants intensify their AI investments. While the company claims leadership in China's AI cloud market, it faces fierce competition from Alibaba BABA and Tencent TCEHY, who possess stronger enterprise relationships and deeper pockets. In autonomous driving, emerging players like Xpeng and WeRide are gaining ground, potentially threatening Baidu's Apollo Go dominance. The company's core search business continues to lose market share to ByteDance's content platforms, highlighting BIDU's vulnerability in its traditional stronghold amid shifting user preferences.\nConclusion\nAs Baidu struggles to navigate these challenges and transform its business model, investors should consider reallocating their capital to companies with more stable growth prospects and clearer paths to profitability in the evolving tech landscape. The combination of market headwinds, execution risks and uncertain returns on AI investments makes a compelling case for investors to exit their positions and seek opportunities elsewhere in the technology sector. BIDU stock currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.\nWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report\nBaidu, Inc. (BIDU) : Free Stock Analysis Report\nTencent Holding Ltd. (TCEHY) : Free Stock Analysis Report\nAlibaba Group Holding Limited (BABA) : Free Stock Analysis Report\nTo read this article on Zacks.com click here.\nZacks Investment Research","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2489463610"}