On Monday, Cathie Wood-led Ark Invest made significant trades involving Baidu Inc. (NASDAQ:BIDU) and Tesla Inc. (NASDAQ:TSLA). The investment firm increased its stake in Baidu while reducing its holdings in Tesla.
The Baidu Trade
Ark Invest’s flagship fund, ARK Innovation ETF (BATS:ARKK), purchased 51,263 shares of Baidu. This acquisition aligns with Baidu’s recent efforts to transform itself from a search engine giant into a leader in AI technology. Baidu is positioning itself as China’s equivalent to Nvidia Corp. , focusing on AI chips and autonomous driving systems.
The company’s semiconductor arm, Kunlunxin, is preparing for a potential $3 billion IPO in Hong Kong, which could further bolster its AI ambitions. The purchase of Baidu shares by Ark Invest, valued at approximately $6.7 million is based on the latest closing price of $130.06.
Despite recent challenges, including layoffs affecting multiple units, Baidu remains committed to its AI-driven transformation. The company has faced scrutiny over its accounting practices, with investor Michael Burry criticizing its financial health following a $2.2 billion impairment in the third quarter.
The Tesla Trade
In a contrasting move, Ark Invest’s ARKK fund sold 2,100 shares of Tesla. on the same day. This decision comes amid a downgrade from Morgan Stanley, which reassigned coverage of the electric vehicle giant to analyst Andrew Percoco. The sale of Tesla shares, valued at approximately $923,118 is based on the closing price of $439.58.
The Elon Musk-led company’s ambitious AI plans and production targets continue to be scrutinized by analysts and investors alike. On Monday, Percoco assumed coverage of the automotive sector and reset several ratings, cutting Tesla to Equal-weight from Overweight with a higher $425 price target. Percoco said Tesla's AI upside was already priced in and warned that automotive headwinds could pressure estimates.
Notably, Ark also sold $3.4 million worth of Tesla shares last Thursday.
Other Key Trades
- Sold 108,578 shares of Adaptive Biotechnologies Corp in ARKG.
- Bought 11,835 shares of Tempus AI Inc in ARKG.
- Bought 44,974 shares of Arcturus Therapeutics Holdings Inc in ARKG.
- Bought 17,326 shares of WeRide Inc in ARKQ.
Benzinga Edge Stock Rankings show Baidu has a Value in the 89th percentile. Here is how it compares against Nvidia.
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Photo Courtesy: PJ McDonnell on Shutterstock.com
This story was generated using Benzinga Neuro and edited by Shivdeep Dhaliwal
