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Baidu Unveils First Dividend and $5 Billion Buyback Plan: ETFs in Focus

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Key Takeaways

  • Baidu boosts shareholder returns, but AI competition may shape future payoff.
  • The $5B buyback may be seen as modest, per a market watcher, as quoted on Bloomberg.
  • ETFs offer diversified exposure to Baidu's AI push amid mixed performance.

The Chinese search giant Baidu Inc. (BIDU - Free Report) announced plans to introduce its first-ever dividend and a three-year stock repurchase program worth up to $5 billion, indicating a shift toward rewarding shareholders. Shares of BIDU rose 0.7% on Feb. 5, 2026 and gained about 2.6% in the pre-market session on Feb. 6, 2026.

The Beijing-based AI and internet company authorized the buyback program through the end of 2028, according to a regulatory filing released Thursday. Baidu also expects to declare its inaugural dividend this year, which could include regular payments or special distributions. The company is likely to report earnings on Feb. 26, 2026.

Aligning With Peers on Shareholder Returns

Baidu’s move is in line with similar shareholder-focused strategies adopted by major Chinese tech peers such as Tencent Holdings Ltd. (TCEHY - Free Report) and Alibaba Group Holding Ltd. (BABA - Free Report) , both of which have recently enhanced capital return programs, per a Bloomberg article, as quoted on Yahoo Finance.

According to Vey-Sern Ling, managing director at Union Bancaire Privee in Singapore, the move represents progress but may fall short of investor expectations. He noted that the $5 billion buyback is relatively modest compared with Baidu’s balance sheet strength and that the company has yet to disclose specific dividend details, per the same Bloomberg article. 

Inside Baidu’s Valuation

Baidu shares trade at a P/E multiple of 15.97X on a trailing twelve-month basis compared with 29.51X offered by the Internet – Services industry. Price/Book (most recent quarter) multiple of BIDU stands at 1.24X versus 2.21X for the underlying industry. The Price/Cash Flow (Most recent fiscal year) multiple of BIDU is 8.03X versus 12.77X offered by the industry. 

Overall, the Baidu stock has a moderate Value score of C. However, note that the BIDU stock has a downbeat Growth score of F and also lacks momentum, with a score of D.

ETF Exposure

Despite the positive reaction post dividend announcement, the BIDU stock remains down roughly 7.5% year to date. However, the stock has jumped 56.5% over the past one year. Over the past six months, BIDU shares have risen by 60%.

Apart from playing the BIDU stock itself, BIDU-heavy ETFs like Invesco Golden Dragon China ETF (PGJ - Free Report) , MicroSectors FANG+ ETN (FNGS - Free Report) , Themes China Generative Artificial Intelligence ETF (DRGN - Free Report) , and Global X Social Media ETF (SOCL - Free Report) also offer ways to play the Chinese giant. However, these ETFs have not seen gains so far this year.

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