4. Baidu, Inc. (NASDAQ:BIDU)
Percentage of ARK Investment Management’s 13F Portfolio: 0.08%
ARK Investment Management’s Stake Value: $36,117,000
Number of Hedge Fund Holders: 44
Following its comeback from a year-long collapse, market analysts are becoming more upbeat on Baidu, Inc. (NASDAQ:BIDU), a Chinese internet search engine giant. On January 12, UBS analyst Wei Xiong increased his price target on Baidu, Inc. (NASDAQ:BIDU) while maintaining a Buy rating on the stock. Xiong claims that the company is making significant progress on its auto and cloud programs, which are in line with the government’s innovation plans.
Baidu, Inc. (NASDAQ:BIDU) CEO Robin Li recently announced that Jidu Auto, a joint venture with Zhejiang Geely Holding Group, will launch mass production of its first electric vehicle with Level-2 autonomous driving capabilities in 2023.
At the end of the third quarter of 2021, 44 hedge funds in the database of Insider Monkey held stakes worth $2 billion in Baidu, Inc. (NASDAQ:BIDU), compared to 59 the preceding quarter worth $3.47 billion.
In its Q3 2021 investor letter, Ariel Investments mentioned Baidu, Inc. (NASDAQ:BIDU) and discussed its stance on the firm. Here is 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 priorities 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.” (Click here to see the full text)
