Cathie Wood is Giving Up on These 5 Tech Stocks

4. Baidu, Inc. (NASDAQ:BIDU)

Number of Hedge Fund Holders: 47

Percentage Decline in the Stake: 100%

Baidu, Inc. (NASDAQ:BIDU) is a Chinese company that provides internet search services, operating through Baidu Core and iQIYI segments. Cathie Wood first invested in Baidu, Inc. (NASDAQ:BIDU) back in Q4 2016, and she has been mostly consistent with her position over the years. However, in the second quarter of 2022, Wood dumped her stake almost entirely. Her hedge fund, which owned 177,142 Baidu, Inc. (NASDAQ:BIDU) shares in Q1 2022, now holds only 100 shares of the company worth $14,000. 

On July 19, Daiwa analyst John Choi lowered the price target on Baidu, Inc. (NASDAQ:BIDU) to $210 from $215 and maintained a Buy rating on the shares. The analyst estimated that Baidu, Inc. (NASDAQ:BIDU)’s primary revenue will shrink by 4.8% year-over-year in Q2. However, the company’s cloud business should “demonstrate resilient growth, despite project delays,” the analyst told investors.

Among the hedge funds tracked by Insider Monkey, 47 funds were bullish on Baidu, Inc. (NASDAQ:BIDU) at the end of March 2022, up from 38 funds in the last quarter. In Q1 2022, John W. Rogers’ Ariel Investments held the biggest stake in the company, comprising 2.6 million shares worth over $349 million. 

Here is what Horos Asset Management has to say about Baidu, Inc. (NASDAQ:BIDU) in its Q1 2022 investor letter:

“Although the initial reaction of the Chinese government was passive, it seems that the blacklist published by the SEC, which already includes companies as important as the technology giant Baidu, has shaken things up. Thus, at the beginning of April the CSRC (China Securities Regulatory Commission) announced possible changes in its regulation that would allow this inspection by foreign auditors, provided that the companies previously communicate to this body the state secrets that would be exposed, as well as the sensitive information that they might have to hand over, and the subsequent audit is carried out in a framework of collaboration with the CSRC. In short, a move in the direction desired by the SEC, although still far from the optimal result, that is, unrestricted access to information.

While these negotiations between the two regulatory bodies are progressing, Chinese companies have to decide how best to preserve their interests. In this regard, some companies are already listed on the Hong Kong stock exchange, as is the case of the three major technology companies (Alibaba Group, Tencent Holdings and Baidu).”