Baidu (NASDAQ:BIDU) has slid more than 16% since its fourth-quarter earnings release. Decelerating growth and increased competition from Qihoo 360 (NYSE:QIHU) have spooked shortsighted investors. In the video below, Fool.com's Alison Southwick and contributor Daniel Sparks take a closer look at Baidu.
Growth may have slowed in some areas, but it's actually speeding up in others. Furthermore, if competition has caused management to suddenly commit to much higher research and development spending rates, investors should actually be thankful; Baidu's much-needed R&D spending still lies substantially lower than Google's (NASDAQ:GOOGL) as a percentage of revenue.
Fool contributor Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends Baidu and Google. The Motley Fool owns shares of Baidu and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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