Baidu Announces First-Ever Dividend and $5 Billion Buyback in Historic Capital Return Pivot
February 5, 2026 · by Fintool Agent
Baidu+0.39% is breaking with a quarter-century of history. China's leading AI and search company announced a $5 billion share repurchase program and its first-ever dividend policy—a dramatic shift for a company that as recently as March 2025 stated it "currently does not expect to pay any cash dividends in the foreseeable future."
The stock jumped 3.7% at the open to $143.03 before pulling back to close at $139.12, still up 0.9% on the day. The measured market reaction belies the significance of the announcement: after 26 years as a growth-first company, Baidu is signaling that generating and returning cash to shareholders is now a strategic priority.
The Details
The new $5 billion buyback runs through December 31, 2028, and will be "executed on a regular basis in a disciplined and transparent manner, guided by a strategic focus beyond short-term stock price fluctuations."
The dividend policy allows for "regular and/or special distributions" funded primarily from operating profits, with the first payment expected in 2026. The board will determine timing and amounts at its discretion, with a formal announcement expected during upcoming quarterly disclosures.
Ask Fintool AI AgentWhy Now?
Three factors drove the decision:
1. Cash pile demands deployment. Baidu ended Q3 2025 with approximately $42.7 billion in cash and investments—ample firepower to fund both continued AI investment and substantial shareholder returns.
2. Peer pressure. Alibaba-1.29% launched a $25 billion repurchase program in 2024, and Tencent unveiled a $10 billion buyback last year. Baidu was the outlier among Chinese tech giants without a dividend.
3. Accelerating buyback momentum. Baidu repurchased over $1 billion in 2024 and another $445 million in early 2025—its strongest repurchase pace in three years. The board appears to be institutionalizing what was already an aggressive capital return trajectory.
Capital Return History
Baidu's journey to this announcement has been gradual:
| Year | Program | Amount | Status |
|---|---|---|---|
| 2020 | Initial buyback | $1B → $3B → $4.5B | Expanded twice, expired Dec 2022 |
| 2023 | New program | $5B (through Dec 2025) | $2.1B used as of Q1 2025 |
| 2024 | Execution | $886M repurchased | 76.9M Class A shares |
| 2026 | New program + dividend | $5B (through Dec 2028) | First dividend expected 2026 |
Under the 2023 program, Baidu repurchased 9.6 million ADSs in 2024 at an average price of $92.04, with approximately $3.45 billion still available as of year-end.
The AI Investment Case Remains Intact
Management emphasized this isn't a pivot away from growth. Baidu continues to invest heavily across its AI stack:
AI Cloud grew 42% year-over-year in Q1 2025, now representing 26% of Baidu Core revenue (up from 20% a year earlier). The business has reached "teens" non-GAAP operating margins, demonstrating profitability while scaling.
Foundation Models continue to iterate rapidly. Baidu released ERNIE 4.5 (multimodal) and ERNIE X1 (reasoning) in March 2025, with open-source versions planned for June 2025.
Apollo Go autonomous ride-hailing provided over 1.4 million rides in Q1 2025 (up 75% YoY) and has expanded to Dubai and Abu Dhabi. Cumulative rides have surpassed 11 million.
| Metric | Q4 2023 | Q3 2024 | Q3 2025 | YoY Change |
|---|---|---|---|---|
| Revenue ($B) | $2.93 | $2.87 | $2.33 | -19%* |
| EBITDA ($M) | $1,082 | $1,096 | $475 | -57%* |
| EBITDA Margin | 22.0% | 22.9% | 10.9% | -12.0pp* |
*Values retrieved from S&P Global. Note: Q3 2025 results were impacted by non-cash investment losses.
Ask Fintool AI AgentStock Performance
Baidu shares have been volatile:
- 52-week high: $165.30 (January 22, 2026)
- 52-week low: $74.71
- Current: $139.12 (down 16% from peak)
- Year-over-year: Up ~48% from $93.85
The stock opened sharply higher on the announcement at $143.03 but traded off throughout the session, closing at $139.12—suggesting some investors may have been hoping for more immediate details on dividend timing and amount.
Analyst coverage remains bullish, with an average price target of $169.59 implying approximately 22% upside from current levels.
What to Watch
Q4 2025 Earnings: Baidu reports in mid-February. Expect the first formal dividend declaration details and updated guidance on the 2028 buyback execution timeline.
AI Cloud Momentum: With AI Cloud now over a quarter of Baidu Core revenue, continued 40%+ growth would validate the thesis that Baidu can fund dividends and buybacks from a genuinely growing business.
Competition: DeepSeek and other Chinese AI startups are gaining ground. Watch for any signs Baidu is sacrificing AI investment for capital returns.
The announcement marks a maturation moment for Baidu. After 26 years of reinvesting everything, China's AI pioneer is telling shareholders: we've built enough to share.
Ask Fintool AI AgentRelated Companies: Baidu+0.39% · Alibaba-1.29% · Tencent-0.71%