Shares of Baidu Inc. are down 0.9% in premarket trading after analysts at Jefferies cut their rating to hold from buy. The analysts, led by Karen Chan, are upbeat about Baidu’s strong position in artificial intelligence but worry that investments in this area, as well as spending on channel marketing, could curb opportunities for margin expansion. She also warns that the company might start to face harder comparisons for its search business this year as well as stronger competitive pressures in key areas, such as e-commerce. “While we remain long-term positive on Baidu’s leading AI position, we would await for a better entry point post the strong share rebound of 60% from its low in May 2016,” Chan wrote. She lowered her price target on shares to $285 from $291. Baidu’s stock is up 45% over the past 12 months, while the S&P 500 has gained 25% in that time.
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