NEW YORK, April 10 (Xinhua) -- Chinese Internet search engine giant Baidu saw its U.S. shares pulled back on Wednesday, after U.S. brokerage and investment bank Oppenheimer downgraded its rating on the company to "perform" from "outperform," according to public corporate information.
Shares of Baidu closed at 177.04 U.S. dollars per share, falling nearly 2.2 percent around market close on Wednesday.
The stock has gained approximately 11 percent year to date, with a market cap of over 61.85 billion U.S. dollars so far.
A stock rating is normally accompanied with a target price issued by analysts or brokerage firms to help clients understand the fair price of a stock compared to its market value.
U.S.-listed Chinese companies traded lower on Wednesday with nine of the top 10 stocks by weight in the S&P U.S. Listed China 50 index ending on a downbeat note. The index tracks the performance of the 50 largest Chinese companies listed on U.S. exchanges by total market cap.
Among the nine losers on Wednesday, Baidu ranked the second after Chinese e-commerce giant JD.com, which declined 2.36 percent.
The downgrade rating came as Oppenheimer raised concerns that the company's increasing spending for the remainder of the year would hold its stock's gains in check.
"We now expect (Baidu) to invest more in key strategic areas (content, feeds, short video and cloud), which will not benefit revenue until late 2019 or early 2020," Oppenheimer analyst Jason Helfstein wrote in a note to investors, local media reported.
The analyst also urged Baidu to invest in new growth drivers, citing the necessity of investments, as China's search market growth has been "slowing to about 10 percent year over year."
Baidu's fourth-quarter revenues rose 22 percent year over year to 3.96 billion dollars, while its revenues for fiscal year 2018 rallied 28 percent to 14.88 billion dollars, according to the company's quarterly earnings report released on Feb. 21.
The company would require heavy investment, as it has been diversifying its business from mobile internet into smart homes, smart transportation, cloud and autonomous driving markets, Herman Yu, CFO of Baidu, said in a company statement.
"Nevertheless, these investments taken together give Baidu a balanced portfolio for short-term, medium-term and long-term returns, and we hope to see these investments bear fruit and accelerate Baidu's revenue growth in the coming years," Yu said.
Major investment banks, such as Goldman Sachs, Citigroup and Barclays, normally offer ratings for certain stocks as a reference for general investors when they make purchase or sell decisions.