1. Baidu, Inc. (NASDAQ:BIDU)
BlackRock’s Stake Value: $1.59 billion
Number of Hedge Fund Holders: 38
Baidu, Inc. (NASDAQ:BIDU) is BlackRock’s largest Chinese stock holding, with 12.04 million shares valued at $1.59 billion. It is a tech giant often referred to as China’s Google, offering a range of services such as the Baidu search engine, online marketing services, content streaming, marketplace services, online encyclopedia, short video mobile application and artificial intelligence initiatives.
38 hedge funds reported owning positions in Baidu, Inc. (NASDAQ:BIDU) at the close of Q4 2021, with a combined value of $1.43 billion. This is down from 44 hedge funds with $2 billion worth of stakes in the Chinese tech giant in the previous quarter.
On April 28, Baidu, Inc. (NASDAQ:BIDU) received Chinese government permits to provide driverless cab-hailing to the public on open roads in Beijing, representing a milestone for the autonomous ride-hailing industry in China. The firm already boasts the largest autonomous driving fleet in China.
Mizuho analyst James Lee in early May gave Baidu, Inc. (NASDAQ:BIDU) a ‘Buy’ rating and revised the price target to $285 from $300. The analyst noted that internet companies in China may face challenges in the first half of 2022 on the back of Covid’s impact on business activities and consumer spending.
Investment firm Ariel Investments talked about Baidu, Inc. (NASDAQ:BIDU) in its Q3 2021 investor letter, stating:
“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 prioritie 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)
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