Baidu crashes 75% from peak — is China's AI titan in trouble or just on sale?
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Long considered China's Google, Baidu has watched its shares fall nearly 75% from its 2021 high, and investors are wondering if the company is just undervalued or truly in trouble in an ever-changing world of tech, as per a report.
How Baidu Rose to Power After Google Left China
But in 2021, Baidu was at its height. After Google's departure from mainland China due to censorship issues in 2010, Baidu emerged as the search engine of mainland China, as per The Motley Fool. Its income skyrocketed from 319 million yuan in 2005 to over 124 billion yuan ($19.5 billion) in 2021, according to the report. That popularity boosted its stock to an all-time high of $339.91 per share, a 12,489% rise since its IPO, as per The Motley Fool report.
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Baidu's Massive Stock Decline
But that momentum has dissipated. In 2025, Baidu is trading at about $88 a share and is up less than 4% year to date, well behind other tech stocks in a rebound year, as per the report.
Why Baidu's Core Business Is Losing Steam
Its core business, online advertising, has been hardest hit by shifting user behavior, according to The Motley Fool. In 2021, the majority of Baidu's approximately $78 billion revenue was derived from its search- and display-based advertising services, as per the report.
But social media apps such as Douyin (China's TikTok), Tencent's WeChat, and other mobile-centric platforms fundamentally altered individuals' manner of searching for information and engaging with digital content, as reported by The Motley Fool.
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Baidu Bets Big on AI, Cloud, and Autonomous Driving
By 2024, online marketing revenue comprised only 55% of Baidu's business, according to the report. On the other hand, its non-advertising businesses—particularly its AI Cloud business—are growing more robustly, as per The Motley Fool. That unit currently accounts for around 24% of total revenue and features such items as its ERNIE large language model, in-house AI chips like Kunlun 800, cloud infrastructure, and its Apollo autonomous vehicle platform, as reported by The Motley Fool.
What's Going On With iQiyi, Baidu's Struggling Streaming Arm?
There's also
iQiyi
, Baidu's video equivalent of Netflix, once a major growth driver, it has of late not been able to churn out breakout content or garner sustained ad revenue, according to the report. Baidu has even contemplated spinning it off completely to concentrate more on cloud and AI, reported The Motley Fool.
Baidu's 2025 Forecast: Flat Revenue and Falling Profits
Even with its expansion into high-growth segments, Baidu's financials have been slow. The analysts consensus projected flat revenues and a 17% drop in earnings in 2025, as reported by The Motley Fool. The firm's online marketing services and iQiyi segments are expected to remain weak, but its AI Cloud business could grow rapidly enough to offset those declines, as reported by The Motley Fool.
However, Baidu's earnings will come down because of its higher investments in its AI Cloud platform, driverless vehicles, and fresh media content for iQiyi, according to the report.
Analysts See Modest Growth for Baidu in 2026
While, for 2026, analysts have projected Baidu's revenue and EPS to rise 5% and 3%, respectively, reported The Motley Fool. "That stabilization would be a step in the right direction, but Baidu would still be a slow-growth stock with limited upside potential," wrote The Motley Fool.
FAQs
Why has Baidu's stock dropped so much since 2021?
Baidu's stock is down about 75% from its peak because of weak ad revenue, rising competition, and slower earnings growth despite big AI investments, as per The Motley Fool report.
Is Baidu still the top search engine in China?
Yes, but its dominance is fading as more users turn to social media platforms like Douyin and WeChat for information and entertainment, as per The Motley Fool report.
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