Baidu Inc. (BIDU) Stock Falls Amid Market Uptick: What Investors Need to Know

U.S.-listed Chinese stocks Alibaba Group Holding. , JD.com, Inc. , Baidu, Inc. , NIO Inc. , Li Auto Inc. , and XPeng Inc. recorded some redemption on Wednesday premarket after a selloff triggered by geopolitical tensions perpetrated by Donald Trump’s U.S. presidential election victory and lackluster domestic stimulus.

However, the stocks gave up the premarket gains in Wednesday’s regular trading session.

Alibaba and JD.com have concluded their Singles’ Day shopping events, reporting solid sales figures as domestic consumer demand increases. Both e-commerce leaders highlighted increased activity during the world’s largest annual shopping festival, signaling a potential recovery in Chinese retail spending, SCMP reports.

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Both platforms indicated significant growth across key metrics, reflecting increased buyer engagement and transaction volumes.

Alibaba’s domestic platforms, Taobao and Tmall, noted record-high participation, with 45 major brands such as Apple Inc , Xiaomi Corp , and Nike Inc each generating sales exceeding 1 billion yuan ($139 million).

Additionally, over 580 brands surpassed the 100-million-yuan GMV mark, a substantial increase from the previous year.

JD.com reported robust growth, with transaction volumes increasing fivefold compared to last year’s figures for over 17,000 brands on its platform.

Around 30,000 small and medium-sized merchants also experienced a 200% year-over-year surge in sales, underlining the broader market recovery.

A recent Fudan University-affiliated think tank report told SCMP that Alibaba led the market with a 38% share during the Singles’ Day event. JD.com secured a 20% share, while ByteDance’s Douyin captured 13%, and Pinduoduo, owned by PDD Holdings Inc , held 10%.

Analysys, a Chinese consultancy firm, told SCMP that Taobao and Tmall accounted for nearly half of all sales across major platforms. Douyin stood out with a 19% increase in GMV, marking the highest growth among competitors.

On the EV front, the European Union sees minimal progress in ongoing talks with China to find an alternative to electric vehicle tariffs, the Economic Times cites familiar sources. Technical discussions will continue following meetings in Beijing, where both sides have claimed some progress.

However, prospects for a swift agreement remain low, as China has yet to meet the EU’s stringent demands for enforceable measures equivalent to the recent anti-subsidy tariffs, the sources added.

Negotiations have focused on setting up a communication channel and preventing cross-compensation, where other product sales, like hybrid vehicles, could offset price limits on EV imports.

Chinese EV stocks Nio, Li Auto, and Xpeng are trading higher on Wednesday in the premarket session, only to give up gains in the regular trading session.

Meanwhile, President-elect Donald Trump’s likely picks of Sen. Marco Rubio as Secretary of State and Rep. Mike Waltz as National Security Adviser suggest a stricter stance on China, the Japan Times reports.

Rubio, known for his strong anti-China rhetoric, has backed a harder line against Beijing.

Waltz shares Rubio’s hawkish approach, focusing on countering China’s influence in the Indo-Pacific. He has pushed to reduce U.S. reliance on Chinese imports and enhance American shipbuilding capacity through allied cooperation.

Price Actions: At the last check on Wednesday, BABA stock is down 0.22% to $91.58. JD is down 0.85%, XPEV is down 2.82%.

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China is home to some of the world’s biggest tech companies, many of which offer services similar to U.S. tech giants. For instance, Baidu is termed as the “Chinese Google,” while Weibo is the Chinese version of X (formerly Twitter) - which is banned in the communist country, for obvious reasons. Alibaba is dubbed the “Amazon of China,” while iQiyi is seen as China’s answer to Netflix .

In the electric vehicle (EV) space, Tesla is the gold standard – not only for U.S.-based companies, but globally. During the heyday of the special purpose acquisition company (SPAC) boom between 2020 and 2021, it was normal for analysts to benchmark newly listed electric vehicle (EV) companies against Tesla, and startups like Lucid Motors also rather generously compared their evolution to that of Tesla.

Cut to 2024, and EV startups in the U.S. are struggling—or worse, have gone out of business. However, Chinese companies are giving Tesla a tough fight not only in the domestic market, but internationally.

Musk Sees Chinese Companies as a Potent Threat

No wonder, then, that Tesla CEO Elon Musk – who once scoffed at the possibility of BYD becoming its competitor – has been all praise for Chinese EV companies. During Tesla’s Q4 2023 earnings call earlier this year, Musk said “Frankly, I think if there are no trade barriers established, they (Chinese car companies) will pretty much demolish most other companies in the world.” He described them as the “most competitive globally" - something every auto executive would attest to (perhaps not in public, but at least privately).

The billionaire echoed similar views during Tesla’s Q4 2022 earnings call last year when he said that Chinese car companies “work the hardest and they work the smartest.” He added, "And so if I would have guessed, there are probably some companies out of China as the most likely to be second to Tesla.”

Which Chinese EV Company Can Be the Next Tesla?

China is the home to multiple EV companies – both established and in the startup space. BYD is already the world’s biggest seller of new energy vehicles (NEVs), even as over 60% of its shipments in Q3 were plug-in hybrid vehicles (PHEVs).

That said, the company’s overall shipments are over twice that of Tesla, and in Q3 2024 it delivered over 1 million cars for the first time. It has surpassed Tesla in terms of total revenues, and while Tesla still retains the title of the world’s largest seller of battery electric vehicles (BEVs), BYD is fast catching up. BYD, incidentally, took the crown in Q4 2023, but Tesla soon reclaimed it.

NIO was once touted as the “Tesla of China.” However, the company failed to meet high expectations. Also, its initial business strategy of using a third party to manufacture its cars was at odds with Tesla, which is among the most vertically integrated automakers globally.

Several other Chinese companies aspire to become the “next Tesla.” For instance, earlier this year, Chinese EV company Zeekr said that its batteries can go from a 10% to an 80% charge in only 10.5 minutes, which is faster than Tesla.

Tesla is Not Merely an EV Company

When we talk about Tesla, it's worth pointing out that it's not merely an EV maker, or else markets wouldn’t be valuing it at over a trillion dollars - which is higher than the combined market cap of all leading automakers put together. Tesla is a play on other businesses, most importantly the autonomous driving and artificial intelligence (AI) endeavors.

On multiple occasions, Musk has stressed that the company’s valuation is linked to its progress on autonomy. Over the long term though, the mercurial CEO believes that AI will add a lot of value for shareholders.

At the shareholder meeting earlier this month, Musk said that the company’s Optimus humanoid could add $25 trillion to Tesla’s market cap. To put it simply, Tesla is a play on EVs, autonomous driving, AI - and above all, Musk, who is quite ambitious and visionary while being controversial at the same time.

Can Xpeng Motors Be the Next Tesla?

I believe Xpeng Motors is one Chinese company that comes quite close to Tesla in strategy as well as ambitions. While the company’s EV deliveries have been below par for most months over the last two years, things are now looking back on track, with deliveries rising to a record high last month.

In terms of autonomous driving, Xpeng's driver-assist technology is regarded as among the best – if not the best – in China. At its AI Day earlier this month, Xpeng unveiled its Turing AI Intelligent Driving System, which it said paves “the way for L4 autonomous driving.”

No wonder that German auto giant Volkswagen invested in the company and said the two will jointly produce cars for the Chinese market. In the U.S., Volkswagen has invested in Rivian , which is seen as a credible challenger to Tesla.

Xpeng is Also an AI Play

XPEV stock is also an AI play, and at the AI Day, it unveiled the advanced humanoid AI Robot Iron which is powered by its Turing AI chip. Xpeng also has a flying car subsidiary named Xpeng Aeroht, which will open pre-orders in December. Finally, like Musk, Xpeng Motors’ CEO He Xiaopeng is quite ambitious and visionary, even as arguably at times his forecasts have turned out to be a lot too optimistic.

All said, if Xpeng Motors really aspires to be the next Tesla, the company has to first reach significant scale in its EV operations. While green shoots are emerging after strong deliveries over the last couple of months, Xpeng has to reach a critical mass in terms of deliveries before it is put in the same league as Tesla.

On the date of publication, Mohit Oberoi had a position in: TSLA , NIO , XPEV , BABA , AMZN , RIVN . All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

U.S.-listed Chinese stocks Alibaba Group Holding. , JD.com, Inc. , Baidu, Inc. , NIO Inc. , Li Auto Inc. , and XPeng Inc. continue a selloff on Tuesday as geopolitical tensions pose a dampener.

The Street remains disappointed with China’s fiscal stimulus. Donald Trump’s U.S. presidential election victory has also triggered concerns about higher tariffs for China.

Last week, China launched a fiscal stimulus package valued at 6 trillion yuan ($840 billion) to relieve local governments of their hidden debt burdens, lower than the Street’s expectations of 10 trillion yuan ($1.39 billion).

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Also, central authorities agreed to issue 800 billion yuan annually in special local government bonds, totaling 4 trillion yuan over the next five years.

The Street also factored in higher tariff risks as Trump, during his presidential campaign, promised to slap tariffs on Chinese imports by up to 60%.

Economic experts have voiced growing concerns about China’s economy following recent data releases and the anticipated impact of Trump’s presidency.

UBS revised its 2025 growth forecast for China downward, projecting an expansion of roughly 4%, with a steeper decline expected in 2026, Bloomberg reports.

Nomura Holdings’ Chetan Seth told Bloomberg that while China’s debt-swap plan exceeded initial expectations, the lack of measures to recapitalize banks or boost consumer spending will likely disappoint investors.

Foreign direct investment in China fell by nearly $13 billion in the year’s first nine months.

Price Actions: At the last check on Monday, BABA stock is down 4.05% at $91.56. JD is down 7.12%, BIDU is down 4.15%, NIO is down 9.20%.

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Chinese markets nosedived on Tuesday as news surfaced that President-elect Donald Trump is eyeing two China hawks, Sen. Marco Rubio (R-FL) and U.S. Rep. Mike Waltz (R-FL), for top roles in his administration.

The potential appointments sparked fears of a tougher U.S. stance on China, sending the Chinese yuan tumbling and stock markets sharply lower in Shanghai and Hong Kong.

Yuan, Chinese Stocks Take a Beating

In currency markets, the yuan slid past 7.4250 against the U.S. dollar, a level not seen since early August. The Shanghai Composite dropped 1.39% to close at 3,422, while the Shenzhen Component fell 0.65% to 11,314.

The Hong Kong Hang Seng Index had an even rougher day, plunging 580 points, or 2.8%, to finish at 19,847—its lowest close in six weeks.

This selloff comes amid growing concerns over a hardline shift in U.S.-China relations. Trump's rumored choice of Rubio, an outspoken critic of China, for Secretary of State, and Waltz, a NATO skeptic and China opponent, as national security adviser, suggests a more aggressive U.S. foreign policy toward Beijing.

If confirmed by the Senate, Rubio, who serves on the Senate Foreign Relations Committee, would be the first Latino to hold the position. Known for his hardline stance on China, Rubio has previously advocated for more stringent measures against Beijing on everything from trade to human rights issues.

Tech and insurance stocks bore the brunt of Tuesday's market rout in Hong Kong. Major Chinese firms saw their share prices sink, with Meituan, Lenovo, China Life Insurance and Semiconductor Manufacturing International recording daily losses between 5% and 8%.

U.S.-listed Chinese companies also experienced sharp premarket declines in New York. At 8 a.m. ET, Alibaba Group Holdings Ltd. was down 3.1%, PDD Holdings Inc. dropped 2.8%, Baidu Inc. fell 2.9%, and electric vehicle makers NIO Inc. and XPeng Inc. tumbled 4% and 6%, respectively.

Weak Credit Data Adds to Market Woes

The political tension came on the heels of lackluster credit data in China, adding to investors’ anxiety. October's new loans from Chinese banks totaled just 500 billion yuan—well below the forecast of 700 billion yuan and a sharp drop from September's figures. The disappointing credit numbers, coupled with the lowest monthly credit growth in 15 years, indicate that China's domestic demand remains fragile.

"China’s economy remains weak. The government seems to lack the will, or the way, to stimulate consumer demand," said veteran Wall Street strategist Ed Yardeni, president of Yardeni Research.

"China announced a $1.4 trillion financing package on Friday. That’s a big number, but it will mostly go to cleaning up and refinancing local government debt," Yardeni added, underscoring skepticism about Beijing's ability to spur economic growth.

David Morrison, senior market analyst at Trade Nation, attributed the market reaction to a "disappointing" fiscal stimulus package announced last week by the National People's Congress (NPC). "Investors continue to respond to the underwhelming fiscal stimulus... There's now the prospect of a huge rise in tariffs, both in size and scope, on exports to the U.S. as threatened by President-elect Donald Trump," Morrison said.

Bank of America analyst Anna Zhou echoed concerns about the limited impact of recent policy measures but sounded slightly more optimistic about the future.

"Weak loan growth for both households and corporates continues to underscore fragile domestic demand," Zhou said.

"To turn credit demand around, more policy support is warranted. The recent pivot in policy stance has been a welcoming sign... we expect more measures to be rolled out in 2025 on both monetary and fiscal fronts, which could help stabilize demand and translate into better credit growth."

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