MarketBeatยท2025-09-29 21:09Core Viewpoint - Cathie Wood from Ark Innovation ETF is diversifying investments into undervalued blue-chip stocks in China, particularly Alibaba and Baidu, as they expand in the global AI market and cater to a growing middle class [1][2]. Group 1: Investment Opportunities - Alibaba and Baidu are gaining attention due to their involvement in the global artificial intelligence race and their diversified business models [2][3]. - Recent rallies in Alibaba and Baidu stocks have outperformed the S&P 500 and Nasdaq-100 indexes, indicating strong investor momentum [3][4]. - The iShares MSCI China ETF previously offered higher dividend yields than both Chinese and U.S. government bonds, attracting significant investment into Chinese blue-chip stocks [5]. Group 2: Company Developments - Alibaba is expanding its data center operations across Asia and the Middle East, positioning itself to capitalize on increasing consumer activity and disposable income [10][11]. - The company is also entering the semiconductor development sector, responding to trade restrictions and government encouragement for local technology firms [12]. - Baidu is crucial for Alibaba's cloud computing and data center expansion, acting as a key player in China's digital infrastructure [14]. Group 3: Market Performance and Analyst Insights - Alibaba's stock has reached a 52-week high, with analysts like Joyce Ju from Bank of America setting a price target of $195, which is above the consensus [13]. - Baidu has seen a significant one-month rally of 44.4%, with increased holdings from major investors like Cathie Wood and Primecap Management [16][17]. - Despite current bullish ratings for Alibaba, some analysts suggest there are better investment opportunities available [18].