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

New York City-based RPD Fund Management sold out its entire position in Baidu (NASDAQ:BIDU) during the third quarter, a move representing about $108 million in value, according to a SEC filing for the period ended September 30.

What Happened

According to a filing with the Securities and Exchange Commission dated November 14, RPD Fund Management fully exited its holding in Baidu (NASDAQ:BIDU), selling all 1.3 million shares in the third quarter. The transaction reflects a net position change of about $108 million based on quarterly average pricing. This marks a complete liquidation of a stake that previously represented 4.5% of the fund’s reported assets.

What Else to Know

Top holdings after the filing:

• NASDAQ:GTM: $163.2 million (97.9% of AUM)
• NYSE:HOUS: $2.3 million (1.4% of AUM)
• NYSE:ANF: $752,840 (0.5% of AUM)
• NASDAQ:DOMO: $503,712 (0.3% of AUM)

As of Friday, Baidu shares were priced at $125.66, up 48% over the past year — well outperforming the S&P 500, which is up 13% in the same period.

Company Overview

Company Snapshot

• Baidu generates revenue primarily through online marketing services, cloud computing, artificial intelligence initiatives, and digital video content via its Baidu Core and iQIYI segments.
• The company offers online marketing services, cloud services, and digital content through its Baidu Core and iQIYI platforms.
• Baidu serves businesses seeking digital marketing and cloud solutions, as well as consumers in China accessing search, video, and entertainment content.

Baidu, Inc. is a leading internet technology company in China, leveraging its scale in search, cloud, and AI-driven services to capture digital advertising and cloud computing demand. The company’s dual-segment structure enables it to diversify revenue streams across both business and consumer markets. Baidu’s competitive edge lies in its robust technology infrastructure, extensive user base, and ongoing investments in artificial intelligence and digital content platforms.

Foolish Take

RPD Fund Management’s move — as large as it is — seems like it could be a sign of shifting conviction in a business undergoing a complicated transition. While Baidu’s stock has rallied meaningfully from its lows, the company’s latest earnings underscore how uneven that recovery remains. Third-quarter revenue fell 7% year over year to RMB 31.2 billion, and Baidu reported a steep RMB 15.1 billion operating loss driven primarily by a RMB 16.2 billion impairment to long-lived assets. Excluding this charge, core operations remained profitable, with non-GAAP net income reaching RMB 3.8 billion ($530 million) and adjusted EBITDA totaling RMB 4.4 billion ($622 million).

RPD’s full exit removes what had been a meaningful 4.5% position in a fund now almost entirely concentrated in a single holding. And while Baidu continues to highlight AI-driven momentum — AI Cloud revenue surged 33%, while AI-native marketing skyrocketed 262% — the mixed financial picture may have prompted a reassessment. Ultimately, anyone considering the stock should weigh improving AI fundamentals against volatility in earnings quality and the company’s ongoing strategic pivot.

Glossary

13F reportable assets under management: The portion of a fund’s assets required to be disclosed in quarterly SEC Form 13F filings.
Net position change: The total dollar value difference in a fund’s holding of a security after buying or selling.
Assets under management (AUM): The total market value of investments managed by a fund or investment firm.
Liquidation: The process of selling off an entire investment position, reducing the holding to zero.
Quarterly average pricing: The average price of a security over a specific quarter, used for reporting or valuation.
Outperformed: Delivered a higher return compared to a benchmark or index over a given period.
Stake: The amount or percentage of ownership a fund or investor holds in a company.
Filing: An official document submitted to a regulatory agency, such as the SEC, detailing financial or ownership information.
Digital content: Online media such as video, music, or articles distributed via internet platforms.
Cloud computing: Delivery of computing services—like storage, processing, and software—over the internet instead of local servers.
Artificial intelligence (AI): Technology that enables machines to perform tasks that typically require human intelligence.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Baidu. The Motley Fool recommends Abercrombie & Fitch. The Motley Fool has a disclosure policy.