Cathie Wood Places Big Bets on Alibaba and Baidu, Showing Confidence in China’s Tech Giants

Cathie Wood, chief of Ark Investment Management, is known for her bet on U.S. tech companies, but she occasionally turns to overseas bets to balance her portfolio. Recently, she made two new investments in popular Chinese tech stocks that have been surging over the past month.

Why Cathie Wood Chose Alibaba and Baidu

As part of her strategy to invest in emerging high-tech companies, Wood’s Ark ETFs usually buy shares in AI, blockchain, biomedical technology, and robotics. Her funds take bold bets on these companies, expecting them to reshape industries and bring significant long-term returns.

However, their volatility can lead to major fluctuations in the values of Ark funds. Over the 10 years ending in 2024, the Ark Innovation ETF lost $7 billion in investor wealth, ranking it as the third-largest wealth destroyer among mutual funds and ETFs, according to Morningstar’s analyst Amy Arnott.

Cathie Wood’s Investment Strategy and History with Alibaba

Wood has been bullish on the market. In a letter to investors published in late April, she dismissed predictions of a recession dragging into 2026 and expressed her optimism about tech stocks.

During the current turbulent transition in the U.S., we think consumers and businesses are likely to accelerate the shift to technologically enabled innovation platforms, including AI, robotics, energy storage, blockchain technology, and multiomics sequencing. Wood wrote in that letter, signaling her confidence in the long-term potential of tech companies.

However, not all investors share this optimism. Over the past 12 months through Sept. 23, the Ark Innovation ETF saw about $1.2 billion in net outflows, according to data from ETF research firm VettaFi.

Cathie Wood buys Alibaba shares after four years…

On Sept. 22 and 24, Cathie Wood’s Ark funds bought a total of approximately $28.6 million worth of Alibaba Group Holding Limited (BABA) American Depository Receipts (ADRs). This represents her first comeback for the Chinese tech giant in four years.

Alibaba has been expanding its growth into AI with recent upgrades to its Qwen3-Max language model. Additionally, their cloud segment posted triple-digit growth in AI products last quarter, and year-to-date, BABA’s ADRs are up over double its current price, reaching a level not seen since 2022.

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Recent Purchases: Alibaba and Baidu

Wood’s Ark funds didn’t stop there; on Sept. 22 alone they added $13.8 million worth of Baidu Inc (BIDU) ADR shares to her stake in the Chinese search engine giant, taking it up by nearly 60% this year.

"We’re very impressed at how quickly China is moving here," Wood said during an appearance on Bloomberg. "The valuations [of Chinese tech stocks] are quite different… they’re roughly half of what they are in the United States."

Conclusion

Cathie Wood’s purchase of Alibaba and Baidu shares reveals her confidence in China’s accelerating AI development pace, with major investment coming from both local governments and private companies alike. This shift could offer valuable opportunities for growth to investors such as Cathie Wood, but not all agree on market trends.

The ongoing volatility associated with the value of Ark funds might seem unsettling based on performance over the previous decade. Nevertheless, Cathie’s optimism in U.S. markets will remain until China becomes a less appealing investment destination for her strategy moving forward.