Betting on Alibaba and NVIDIA Help Keywise Return 65%; Here Are Its Other Top Picks

In Alibaba Group Holding Ltd (NYSE:BABA), Keywise held 301,413 shares worth $51.97 million heading into the first quarter of 2018. The stake was reduced by 23%, but still amassed almost 21% of the fund’s equity portfolio. After almost doubling in value during 2017, Alibaba Group Holding Ltd (NYSE:BABA) is still going strong, as it has gained another 6% since the beginning of the year. Over the last couple of years, Alibaba Group Holding Ltd (NYSE:BABA) has been working hard to establish itself not only as an eCommerce leader in China, but also venturing into the brick-and-mortar retail, as well as other industries such as food delivery, cloud computing, bike sharing. In addition, Alibaba Group Holding Ltd (NYSE:BABA) has embarked on a campaign to expand geographically, with a focus on South East Asia. Among its latest acquisitions is Daraz, owned by Rocket Internet, which Alibaba purchased for an undisclosed amount. Daraz will allow Alibaba Group Holding Ltd (NYSE:BABA) to expand its ecommerce segment, as  it has operations in Pakistan, Bangladesh, Myanmar, Sri Lanka and Nepal. Aside from Keywise, 114 funds tracked by Insider Monkey were long Alibaba Group Holding Ltd (NYSE:BABA) at the end of 2017.

In NVIDIA Corporation (NASDAQ:NVDA), Keywise slightly reduced its position by 1,700 shares to 240,220 shares worth $46.48 million. Overall, 48 funds in our database disclosed long positions in NVIDIA Corporation (NASDAQ:NVDA) in the last round of 13F filings. Helped by the boost in the cryptocurrency market that drove sales of GPU higher, NVIDIA Corporation (NASDAQ:NVDA)’s stock surged by 90% in 2017 and is 30% in the green year-to-date. During the first quarter, NVIDIA Corporation (NASDAQ:NVDA) saw GPU sales jump by 77% to $2.78 billion, while Tegra Processor sales increased by 33% to $442 million. Across platforms, OEM and IP (which includes GPUs for cryptocurrency mining)  saw revenue jump by almost 150% on the year, but Gaming and Datacenter also saw substantial growth of 68% and 71%, respectively. Looking ahead, both analysts and the management expect the demand from the cryptocurrency market to decline, but, nevertheless, NVIDIA Corporation (NASDAQ:NVDA) is expected to shine in the Gaming and Datacenter segments, while its newer platforms, such as AI and automotive shoulf continue to gain ground. Overall, NVIDIA Corporation (NASDAQ:NVDA)’s first-quarter EPS of $0.25 and revenue of $3.21 billion topped analyst estimates by $0.39 and $310 million, respectively.

Let’s now move on to Keywise’s newer bets. In Baidu Inc (ADR) (NASDAQ:BIDU), the fund initiated a stake containing 182,200 shares worth $42.67 million during the fourth quarter. Since the beginninf of 2018, Baidu Inc (ADR) (NASDAQ:BIDU)’s stock has appreciated by 11% as the company made headlines on a number of occasions. In March, the company received first licenses for open-road testing of its autonomous cars in Beijing and entered into an agreement with Meituan-Dianping to develop driverless cars for food delivery. In April, Baidu Inc (ADR) (NASDAQ:BIDU) announced that it would divest its majority stake in financial services business Du Xiaoman. Moreover, the company delivered strong first-quarter results, with EPS of $2.60 beating the estimates by $0.96, while its revenue went up by 25% on the year to $3.33 billion, topping expectations by around $140 million. Baidu Inc (ADR) (NASDAQ:BIDU) also saw a 26% growth in core revenue to $2.57 billion, while the share of mobile revenue went up by eight percentage points to 78%. For the current quarter, Baidu expects revenue between $3.97 billion and $4.17 billion, which is higher than the consensus estimate of $3.78 billion. A total of 52 funds from our database held shares of Baidu Inc (ADR) (NASDAQ:BIDU) at the end of 2017.

Even though Momo Inc (ADR) (NASDAQ:MOMO) was not added to Keywise’s equity portfolio during the fourth quarter (the stake was initiated during the second quarter of 2017), it’s still noteworthy because the fund boosted its exposure to the company almost sixfold to 1.29 million shares valued at $31.50 million during the fourth quarter. The position was increased as Momo Inc (ADR) (NASDAQ:MOMO)’s shares slid by over 20% during the fourth quarter and the bet paid off as the stock has gained over 45% since the beginning of 2018. The stock returned to growth as investors regained confidence in user growth and live-video revenues. For the fourth quarter, Momo Inc (ADR) (NASDAQ:MOMO) reported live-video service revenue of $328 million, up by 68% on the year and the number of monthly active users jumped to 99.1 million from 81.1 million. For the first quarter, Momo Inc (ADR) (NASDAQ:MOMO) expected revenue between $387 million and $402 million. The company is expected to report its first-quarter earnings on May 22. Overall, 17 hedge funds disclosed long positions in Momo as of the end of 2017.

Disclosure: none