The Baidu Stock Rally Looks Set To Continue

BIDU: Baidu logo

Chinese search engine behemoth Baidu’s stock (NASDAQ: BIDU) has witnessed a solid rally over the last month (about 21 trading days), gaining roughly 33%, compared to the broader S&P 500 which was up about 7% over the same period. Chinese tech stocks in general have fared well over the last several weeks, as China scales back on its stringent zero Covid-19 policy after over two years. This big re-opening of the Chinese economy should bode well for demand, overall, helping technology players. Moreover, there have been some factors specific to Baidu, as well. For one, the U.S.-based asset management company Blackrock disclosed that it had increased its stake in the company to 6.6% as of the last quarter, up from a previous ownership stake of 3.5%. Additionally, Reuters recently reported that Baidu had plans to roll out an artificial intelligence chatbot service similar to OpenAI’s ChatGPT. This, coupled with the company’s progress with self-driving vehicles, could be giving investors confidence about Baidu’s progress in the artificial intelligence space.

However, now that Baidu stock has seen a rise of about 33% over the past month, will it continue its upward trajectory in the near term, or is a sell-off imminent? Going by historical performance, there is an 80% chance of a rise in BIDU stock over the next month. There were 60 instances in the last 10 years when Baidu (BIDU) stock saw a trailing 21-day rise of 33% or more. Out of this, 48 of those instances resulted in BIDU stock rising over the subsequent one-month period (21 trading days). This historical pattern reflects 48 out of 60, or about 80% chance of a rise in Baidu stock over the next month. See our analysis on Baidu Stock Chance of Rise for more details.

Calculation of ‘Event Probability’ and ‘Chance of Rise’ using the last ten years data

  • After moving 13% or more over five days, the stock rose in the next five days on 62% of the occasions.
  • After moving 21% or more over ten days, the stock rose in the next ten days on 61% of the occasions
  • After moving 33% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 80% of the occasions.
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 Returns Feb 2023
MTD [1]
YTD [1]
Total [2]
 BIDU Return 13% 33% -7%
 S&P 500 Return 1% 7% 84%
 Trefis Multi-Strategy Portfolio 2% 14% 260%

[1] Month-to-date and year-to-date as of 2/2/2023
[2] Cumulative total returns since the end of 2016

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