Cathie Wood's Ark Invest Goes Bargain Hunting in Chinese Stocks: Alibaba, Pony AI, and Baidu
Cathie Wood, the founder and CEO of Ark Invest, has been on a buying spree, adding to her positions in three prominent Chinese companies: Alibaba, Pony AI, and Baidu. This move reflects Wood's confidence in the long-term potential of the Chinese market, despite recent challenges and uncertainties.
Alibaba: E-commerce Pioneer with a Solid Foundation
Alibaba, a leading e-commerce platform in China, has experienced a significant rebound in 2025, with its stock nearly doubling. While revenue growth has been modest, its core e-commerce businesses, Taobao and Tmall, remain highly profitable. These platforms generate a substantial portion of Alibaba's revenue and adjusted EBITDA, allowing the company to invest in future growth opportunities, such as AliExpress and its cloud business.
Alibaba's financial strength enables it to return value to shareholders through dividends and share buybacks. With a forward earnings multiple of 16, the stock appears reasonably priced, suggesting potential for further gains if its strategic investments prove successful.
Pony AI: A Rising Star in Autonomous Driving
Pony AI, a provider of autonomous driving technology, has seen significant volatility since its IPO. Despite the fluctuations, the stock has delivered a strong return, outperforming the market. Pony AI has made strides in the commercialization of robotaxis in China and is expanding its services internationally, including a recent announcement to operate in Qatar.
The company's revenue has grown substantially, driven by the increasing adoption of its robotaxi services. Although Pony AI is currently unprofitable, its $7.3 billion market capitalization reflects investor optimism about its potential in the rapidly evolving autonomous driving market. Pony AI's participation in the World Artificial Intelligence Conference 2025 highlights its leadership and innovation in the sector.
Baidu: A Late Bloomer with AI Potential
Baidu, China's leading search engine operator, has experienced a resurgence driven by its growing AI chips business. Increased trading restrictions have prompted China to rely on domestic players, positioning Baidu favorably. Despite revenue declines in recent years, analysts anticipate a return to growth in both revenue and adjusted earnings.
Trading at a modest 12 times trailing earnings, Baidu presents an attractive valuation for a company with a history of success. The potential of its AI initiatives suggests that Baidu may be poised for a renewed period of growth and profitability.
