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Investing.com -- Baidu shares fell as much as 7% in Hong Kong on Tuesday, marking their steepest decline since April 7, following a 50% price surge earlier this month.
The Chinese tech giant’s stock had been trading in the technical overbought zone for two weeks prior to Tuesday’s drop, according to market data.
Despite the pullback, Baidu remains the best-performing stock on the Hang Seng Tech Index this month.
"It’s natural for investors to take profit once in a while during strong rallies, especially for stocks like Baidu where the core business is weakening and the story hinges on AI where earnings visibility is low," said Vey-Sern Ling, a managing director at Union Bancaire Privee.
The company’s recent performance has been driven largely by its artificial intelligence initiatives, though analysts note these efforts have yet to demonstrate clear earnings potential.
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