TLDR
- Baidu unveils first-ever dividend policy and $5 billion share buyback program extending to December 2028
- Shares rose over 5% in after-hours trading on the news, with Hong Kong shares also climbing
- Company leverages $42.7 billion cash position to fund new shareholder return program
- Stock had fallen 14% over five sessions despite 55% gain over past year
- Analysts rate the stock Strong Buy with $169.59 average price target
Baidu shook up the market with a landmark announcement revealing its first dividend policy alongside a massive $5 billion buyback program. The dual reveal triggered a sharp rally in trading.
Shares climbed more than 5% in U.S. after-hours trading. Hong Kong shares posted strong gains during the morning session.
The three-year buyback program extends through December 31, 2028. Baidu will execute repurchases through open market transactions at prevailing market prices. The program remains subject to market conditions and regulatory requirements.
The dividend policy represents a historic first for the company. Baidu expects to declare its inaugural dividend payment in 2026. Declaration timing and amounts will be determined by the board based on financial performance and capital requirements.
Baidu holds $42.7 billion in cash reserves as of September 2025. This strong balance sheet enables the company to return capital while maintaining operational flexibility. The company previously completed a $5 billion buyback between 2023 and 2025.
Following Tech Giant Playbook
The move mirrors strategies from Chinese tech leaders. Alibaba rolled out a $25 billion repurchase program in 2024. Tencent Holdings announced a $10 billion buyback last year.
Baidu stated the initiatives aim to create sustained shareholder value. The company emphasized its sound financial management capabilities support the proactive return strategy. Future dividends will come primarily from operating profits and potentially non-core asset sales.
Stock Performance and Valuation
The announcement follows a rough stretch for shares. The stock dropped for five consecutive sessions. That decline wiped out about 14% of market value.
Year-over-year performance shows a 55% gain. This lags Alibaba’s 60% surge during the same timeframe.
Trading data shows shares at $137.95 with market capitalization around $49.8 billion. InvestingPro analysis indicates the stock trades below Fair Value. The company maintains more cash than debt on its balance sheet.
Analyst Outlook
Wall Street remains bullish on Baidu’s prospects. The consensus rating stands at Strong Buy based on 12 Buy ratings and two Hold ratings. The average price target of $169.59 suggests 22.9% upside from current levels.
Analysts point to the company’s leadership in AI development and autonomous driving technology. The company leads China’s push into chip development and artificial intelligence applications.
Recent analyst moves include Freedom Capital Markets raising its target to $160. Benchmark boosted its target to $215 citing upcoming catalysts. Tiger Securities increased its target to $150 based on AI chip subsidiary Kunlunxin’s planned Hong Kong IPO.
HSBC lifted its target to $130 highlighting the potential KLX subsidiary spinoff. The Apollo Go unit recently secured Dubai’s first permit for driverless testing on public roads.
The post Baidu (BIDU) Stock Jumps as Tech Giant Launches First Dividend and $5 Billion Buyback appeared first on Blockonomi.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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