Big contrast! The well-known hedging fund Contrarian Capital suddenly invested $13.45 million to buy 102,139 shares of Baidu, accounting for 3.4% of the fund's assets in one go. This is a signal for a fund that rarely chases trends.

Baidu's stock price has increased by 52% in the past year, outperforming the S&P 500 (which only rose by 20%). The current stock price is $128.94, with a market capitalization of $40.75 billion.

Why is this fund suddenly interested in Baidu? It's probably not because of search and advertising (that was a story from ten years ago). More likely, it's because of Baidu's actions in the AI sector—ERNIE large model + autonomous driving Apollo. These two businesses are now the new engines of Baidu's growth; the advertising business is no longer the main focus.

In other words: Baidu is transforming from "the Google of China" into an "AI company". Fund managers may be betting that this turnaround can succeed. The key going forward is whether Baidu's AI cloud services can truly land with enterprise clients, and how to find a balance between spending money on AI and protecting profits.