Cathie Wood's ARK Buys Alibaba and Sells Baidu: $125.95 vs $134.80
1h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
ark-investalibaba-baba
Fazen Markets Editorial Desk
Collective editorial team · methodology
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Cathie Wood’s ARK Invest made a significant portfolio rotation in Chinese technology stocks. The firm bought shares of Alibaba Group and sold shares of Baidu. The trades were disclosed in filings reported on June 5, 2026. This move comes as Alibaba traded at $125.95 and Baidu at $134.80 as of 00:55 UTC today, with the market showing diverging daily losses for the two stocks. The rotation signals a strategic pivot within the volatile China equity space by one of its most prominent active managers.
ARK Invest's last major public repositioning in Chinese internet stocks occurred in late 2025. That move involved trimming several positions amid regulatory clarity talks. The current macroeconomic backdrop features persistent concerns over China's consumer spending and property sector stability. Global equity indices have shown resilience, but China-specific funds have lagged.
The immediate catalyst for this specific rotation likely stems from divergent earnings trajectories and valuation resets. Alibaba has undergone aggressive restructuring and shareholder return programs. Baidu faces intensifying competition in its core online marketing and cloud segments from newer entrants. This trade reflects a bottom-up assessment of company-specific fundamentals over broader sector sentiment.
The live market data reveals stark performance differences between the two holdings. At 00:55 UTC, Alibaba's stock was quoted at $125.95, representing a daily decline of 3.72%. Its trading range for the session was narrow, between $125.95 and $128.17. Baidu showed relative strength, trading at $134.80 with a milder daily drop of 1.40%. Its intraday range was wider, from $131.89 to $135.78.
The price-to-sales ratios further illustrate the valuation gap. Alibaba currently trades near 1.5x forward sales, a multi-year low. Baidu trades closer to 2.8x, reflecting its AI narrative premium. The KraneShares CSI China Internet ETF (KWEB), a common benchmark, is down approximately 5% year-to-date. This places both stocks within a struggling sector but with individual stock selection becoming paramount for active managers seeking alpha.
| Metric | Alibaba (BABA) | Baidu (BIDU) |
|---|---|---|
| Price (5 Jun 00:55 UTC) | $125.95 | $134.80 |
| Daily Change | -3.72% | -1.40% |
| YTD Performance (approx.) | -8% | -4% |
The direct second-order effect is pressure on Baidu's stock from a visible, conviction seller exiting. It may benefit competing AI and search platform stocks like Tencent. Alibaba's buyers may include other funds following a momentum signal from a high-profile manager. This could provide near-term support for BABA shares against broader market selling.
A key risk to this thesis is that ARK's trade is a minor rebalancing, not a major conviction call. The firm manages multiple actively traded ETFs, and the disclosed volume may be small relative to each company's average daily trading volume. The counter-argument is that regulatory risks remain systemic for all Chinese ADRs, limiting any single stock's upside potential from managerial rotation alone.
Positioning data shows hedge funds have been net sellers of Chinese tech ADRs for three consecutive quarters. Long-only institutional ownership of Alibaba has declined from peak levels. ARK's buy could represent an early, contrarian flow against this trend, targeting a deeply oversold name while taking profits in a relatively better-performing one.
Investors should monitor Alibaba's upcoming earnings report, scheduled for late July 2026. Key metrics will be cloud revenue growth and free cash flow generation for buybacks. For Baidu, the next catalyst is its Ernie AI model developer conference in early August, which will showcase commercial adoption progress.
Technical levels are critical. For BABA, the $120 level represents major long-term support; a sustained break below could invalidate the bullish rotation thesis. For BIDU, resistance sits near $140, a level it has failed to hold multiple times in 2026. The relative performance ratio of BABA to BIDU will indicate if ARK's timing was correct.
The final watchpoint is ARK's own subsequent filings. Continued accumulation of Alibaba shares over the next month would confirm a building strategic position. Any quick reversal of the Baidu sale would indicate the trade was tactical, not strategic.
ARK likely sold Baidu to capture relative outperformance and reallocate capital. Baidu's stock had declined less year-to-date than Alibaba's and many China internet peers. The sale funds the new position in Alibaba and may reflect a view that Baidu's AI premium is fully valued amidst fierce competition, while Alibaba's e-commerce cash flows are undervalued after its corporate restructuring.
Historical performance is mixed. ARK was an early investor in JD.com and Pinduoduo during their growth phases, generating significant returns. However, the fund also held positions in Tencent and Alibaba during the 2021-2022 regulatory crackdown, sustaining heavy losses. The firm's China strategy has shifted from broad sector exposure to selective, conviction-driven picks based on disruptive innovation themes.
The ARK trade has a minimal direct impact on the KraneShares CSI China Internet ETF (KWEB) because it is an index fund. However, it signals to active managers that bottom-up stock selection is re-emerging as a driver in the sector. If other funds follow ARK's lead, it could increase the correlation breakdown between major constituents like Alibaba and Baidu within the KWEB basket, leading to more volatile fund performance versus its index.
ARK Invest is betting Alibaba's deep value outweighs Baidu's AI narrative in the current China market cycle.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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