Why Baidu Stock Is Moving

Baidu Inc (NASDAQ BIDU) shares are trading higher by 2.56% to $88.45 going into the close of Monday’s session as investors reacted positively to the People's Bank of China's (PBoC) surprise interest rate cut.

The central bank's decision to lower the 14-day reverse repurchase rate by 10 basis points, alongside a liquidity injection of over $10 billion, has fueled optimism for economic recovery in China.

What This Matters: The PBoC's move impacts technology companies like Baidu, which play a central role in China's growth strategy. Baidu, often dubbed the “Google of China,” has evolved beyond its core search engine business to become a leader in artificial intelligence (AI), autonomous driving and cloud computing.

The rate cut, which reduces business borrowing costs, is expected to encourage increased spending in the technology sector. This could drive greater demand for Baidu's AI and cloud services, as enterprises look to enhance their digital infrastructure amid favorable financial conditions.

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What Else: Baidu's autonomous driving platform, Apollo, also benefits from increased investment and consumption as liquidity flows through the economy. Baidu pioneered the development of robotaxis and smart city infrastructure in China; these sectors could receive further governmental support as part of Beijing's push to modernize the country's technological backbone.

With lower borrowing costs and potential government-backed stimulus for innovation, Baidu's efforts in autonomous mobility and AI-driven services are well-positioned for growth.

Additionally, as liquidity enters the market, Baidu's core digital advertising business is poised for an uplift. The company generates a significant portion of its revenue from online advertising, which tends to rise in tandem with broader economic activity.

With businesses likely to increase marketing budgets in response to anticipated consumer spending, Baidu could see a resurgence in advertising revenues.

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How To Buy BIDU Stock

By now you're likely curious about how to participate in the market for Baidu – be it to purchase shares, or even attempt to bet against the company.

Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy ‘fractional shares,' which allows you to own portions of stock without buying an entire share. For example, some stock, like Berkshire Hathaway, or Amazon.com, can cost thousands of dollars to own just one share. However, if you only want to invest a fraction of that, brokerages will allow you to do so.

If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to ‘go short' a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.

According to data from Benzinga Pro, BIDU has a 52-week high of $136.53 and a 52-week low of $79.68.