The lawsuit, filed in the U.S. District Court for the Southern District of New York, covers investors who purchased Baidu American Depositary Shares between November 18, 2025, and August 17, 2026. Plaintiffs contend that despite repeated assurances that AI initiatives were successfully stabilizing total revenue, the company’s actual financial performance told a different story. Fiscal 2025 revenue fell 3% to RMB 129.1 billion, followed by a 4% year-over-year decline in the second quarter of 2026.

The market reacted sharply to these disclosures on August 18, 2026, when BIDU shares plummeted 12.73% to close at $90.87. This drop wiped out substantial value for institutional holders, with one fund alone reportedly absorbing $6.6 million in losses in a single session. Joseph E. Levi, representing the firm SueWallSt, noted that the alleged gap between executive assurances and reported revenue results is a primary concern for pension funds and fiduciaries tasked with overseeing such assets. Investors seeking to serve as lead plaintiff in the litigation have until November 13, 2026, to file their applications.