The Motley Fool·2025-11-26 15:41Company Overview - Baidu, Inc. is a leading internet technology company in China, known for its dominant search engine, diversified cloud offerings, and expanding AI initiatives, leveraging its strong technological foundation and extensive user base to drive growth across digital advertising, cloud computing, and online entertainment [5] - The company generates revenue primarily from digital advertising, cloud computing, and subscription-based content platforms, serving businesses seeking digital marketing and cloud solutions, as well as consumers accessing search, video, and entertainment content [8] Investment Activity - Contrarius Group Holdings Ltd significantly increased its stake in Baidu during the third quarter of 2025, reporting ownership of 891,749 shares, up from 148,544 shares in the previous quarter, with the position now valued at $117.51 million [2][3] - The Baidu stake now accounts for 5.32% of Contrarius's $2.21 billion in reportable U.S. equity assets as of September 30, 2025, making it the fund's fifth-largest holding [3][9] - The increase in Baidu shares by 500% is notable, especially compared to a 1,285% increase in shares of Meta Platforms, indicating a stronger conviction in Baidu despite the latter's higher valuation [9][10] Financial Performance - As of November 11, 2025, Baidu's shares were priced at $131.95, reflecting an 8.9% decline from the 52-week high, while the stock returned 49.47% over the past year, outperforming the S&P 500 by 34.13 percentage points [7] - Baidu's market capitalization is reported at $45.36 billion, with a revenue of $18.09 billion and a net income of $1.22 billion for the trailing twelve months (TTM) [3][7] - The company experienced a $2.3 billion impairment cost in Q3, temporarily affecting profitability and raising its P/E ratio to 41, but the forward P/E of 17 suggests potential for gains if investment conditions remain favorable [12][13]