Baidu Stock Is Up 48% This Past Year — So Why Did One Fund Just Exit a $108 Million Position?

Core Insights - RPD Fund Management has completely exited its position in Baidu, selling all 1.3 million shares during the third quarter, which represents a value of approximately $108 million [2][3][11] - Baidu's stock price as of the latest market close was $125.66, reflecting a 48% increase over the past year, significantly outperforming the S&P 500's 13% rise in the same period [4][5] - Baidu's revenue generation is primarily through online marketing services, cloud computing, AI initiatives, and digital video content, with a dual-segment structure that diversifies its revenue streams [9][10] Financial Performance - Baidu reported a 7% year-over-year decline in third-quarter revenue, amounting to RMB 31.2 billion, alongside a significant operating loss of RMB 15.1 billion, primarily due to a RMB 16.2 billion impairment of long-lived assets [11][12] - Excluding the impairment charge, Baidu's core operations remained profitable, with non-GAAP net income reaching RMB 3.8 billion (approximately $530 million) and adjusted EBITDA totaling RMB 4.4 billion (approximately $622 million) [11][12] Strategic Positioning - The exit by RPD Fund Management removes a significant 4.5% position in the fund, which is now largely concentrated in a single holding [12] - Despite the mixed financial results, Baidu continues to emphasize growth in AI-driven segments, with AI Cloud revenue increasing by 33% and AI-native marketing soaring by 262% [12]