5 Chinese Stocks in Cathie Wood’s Portfolio

Page 1 of 5

In this article, we discuss the 5 Chinese stocks in Cathie Wood’s portfolio. If you want to read our detailed analysis of Chinese stocks and Cathie Wood’s investment strategy, go directly to 8 Chinese Stocks in Cathie Wood’s Portfolio.

5. Baidu, Inc. (NASDAQ:BIDU)

ARK Investment Management’s Stake Value: $36.11 million

Percentage of ARK Investment Management’s 13F Portfolio: 0.08%

Number of Hedge Fund Holders: 44

Baidu, Inc. (NASDAQ:BIDU) is a tech giant also known as the Chinese ‘Google’, being the most popular search engine tool in China. 44 hedge funds from Insider Monkey’s database reported owning stakes in Baidu, Inc. (NASDAQ:BIDU) at the close of the third quarter, down from 59 in the previous quarter. Wood’s ARK Investment Management owns approximately 235,000 shares in the tech firm at the close of September, down from 680,000 shares at the end of June.

Investment firm Ariel Investments talked about Baidu, Inc. (NASDAQ:BIDU) in its third-quarter investor letter. Here’s what the fund said:

“When we have such a high level of conviction for a company it is not uncommon for us to own it in size across our portfolios. Such is the case with technology giant Baidu, whose leading search engine has been dubbed the “Google of China.” This quarter shares sold off in sympathy with the Chinese internet sector as investors were rattled by the government’s sweeping regulatory crackdown intended to promote “common prosperity” by easing wealth inequality. While we recognize the greater political risk of investing in emerging markets such as China and incorporate an appropriately higher risk premium in the discount rate in our valuation models, we believe Baidu’s business strategy is aligned with national policies and prioritie and is therefore not adversely impacted unlike some other
players in the internet sector who are in the eye of the storm.

Indeed, the Chinese government recognizes Baidu’s large, upfront investments in many next-generation artificial intelligence (AI) technologies and hails it as a national champion. For example, the company’s Advanced Driving Support System (ADAS), Apollo, has twice as much data on miles driven than any other initiative in the world, giving Baidu (and China) a large lead in the global AI arms race. In addition, Baidu’s cloud offering touts highly differentiated Platform as a Service (PaaS) features and capabilities for a demanding enterprise customer base. While these initiatives are a temporary drag on margins and require long-term execution, their success will bolster China’s “dual circulation” strategy aimed at spurring domestic demand, innovation and self-reliance.”


Page 1 of 5