It is Baidu (BIDU 0.39%) -- and not Qihoo 360 (QIHU.DL) -- hitting new all-time highs today. 

This kind of scenario didn't seem possible two summers ago after Qihoo 360 used its muscle as the dot-com behind China's leading Internet browser and online-security software to roll out a search engine of its own. Qihoo 360 initially took market share from the lesser players, but when it began nibbling away at Baidu's market dominance, the naysayers pounded the stock several months later. 

Shares of Baidu bottomed out at $82.98 in April. Short interest peaked in mid-June when more than 15.5 million shares were sold short while the stock was still trading in the double digits. We know how well things played out for those boo birds. Baidu went on to take off after posting strong quarterly results and making acquisitions that helped make it a major player in video and mobile. The stock has now more than doubled since bottoming out eight months ago.

Baidu didn't vanquish Qihoo 360 to get here. In fact, Qihoo 360 has done quite well for those that bought in last year when it was starting to gain traction. Revenue soared 124% in its latest quarter, and that's now that its getting its feet wet in terms of monetizing its search platform. Qihoo 360 begins this week 15% off its October highs, but it has more than tripled over the past year. Baidu investors can't say that.

But this isn't the first time that Baidu rose to the occasion after being dismissed by the investing community. Five years ago the stock fell all the way to what would now be a split-adjusted price of $10.05 after a Chinese television show uncovered that Baidu was accepting ads from unlicensed medical companies to promote their questionable pharmaceuticals through Baidu's paid-search platform.

Baidu owned up to the allegations and suspended advertisers that were accounting for as much as 15% of its business. This is the kind of blow that would obliterate some companies, but Baidu became more vigilant and turned into an even better investment. Baidu lived to have the last laugh and the stock is now a 16-bagger just five years later.

Keep this in mind the next time Baidu proves mortal, investors rotate out of Baidu, and the short sellers swoop in. There may very well come a time when the circumstances hitting Baidu have a lasting impact, but for now it's only meant some pretty amazing buying opportunities for those taking advantage of the pessimism.