Baidu Inc BIDU shares are trading lower by 6.7% to $106.75 during Tuesday’s session. Shares of U.S.-listed Chinese stocks are trading lower after Chinese planning officials reportedly fell short of investor stimulus expectations.
What’s Happening In China: The Hang Seng Index plunged over 9%—its worst single-day performance since 2008—as investors reacted to the lack of aggressive economic stimulus from Beijing, sparking fears of a prolonged slowdown in China’s economy.
Baidu, known for its dominance in internet search, artificial intelligence and autonomous driving technologies, has significant exposure to China's economic health.
The selloff was driven by a growing sense of disillusionment after China's National Development and Reform Commission (NDRC) failed to deliver the large-scale fiscal measures many had anticipated. Investors had been expecting sweeping initiatives to boost consumption, increase infrastructure spending, or 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—far below what many hoped for. This muted response from Chinese authorities triggered a wave of profit-taking, as investors locked in gains following weeks of strong market performance.
Why It Matters: Baidu's stock, like many other major Chinese tech companies, was hit particularly hard by the selloff. As a tech leader with substantial investments in AI, cloud computing, and autonomous vehicles, Baidu is highly reliant on a healthy and growing Chinese economy to support its innovation-driven business model.
The company has been expanding its AI services, including Baidu Cloud and its autonomous driving platform Apollo, betting on long-term growth in China’s technology sector. However, without a robust fiscal boost, concerns have mounted over slower economic growth, which could reduce corporate spending on AI and cloud services, as well as consumer demand for autonomous driving technologies.
The broader selloff in Chinese tech stocks, including giants like Tencent and Alibaba, has added to the pressure on Baidu. These companies, like Baidu, are heavily owned by foreign investors, who are more likely to react swiftly to changes 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.
How To Buy BIDU Stock
Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.
For example, in Baidu’s case, it is in the Communication Services sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.
According to data from Benzinga Pro, BIDU has a 52-week high of $135.85 and a 52-week low of $79.68.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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