We recently published a list of Michael Burry’s Top Holdings Were Gaining While NVDA Was Crashing. In this article, we are going to take a look at where Baidu, Inc. (NASDAQ: BIDU) stands against other Michael Burry’s top Holdings that were gaining while NVDA was crashing.
Michael Burry’s name is synonymous with contrarian investing strategies, being one of the few investors who bet against the housing market and profiting from the subprime mortgage crisis between 2007 and 2010. His stance on the real estate market in 2008 made the American investor and hedge fund manager famous enough to make it in the 2015 film “The Big Short,” where he was portrayed by Christian Bale.
Over the years, Burry, who established a renowned and well-regarded California-based hedge fund Scion Asset Management, LLC in 2013, often made headlines for his recession warnings and market crash “predictions”. However, with warnings about economic downturns fizzling out, Burry’s reputation as both an expert and hedge fund manager was often at stake.
But even though some of his recession warnings have not played out as predicted, Burry remains one of the market geniuses whose moves investors value and follow as explained in our recent survey of Michael Burry’s portfolio in 2024.
His firm has achieved a return of over 160% over the past decade, outperforming the S&P 500 during that time, according to Ticker Nerd.
Scion Asset Management manages hedge funds with discretionary assets under management of $196,206,549 (as of March 2024). In its fourth quarter SEC 13F filing on February 14, Burry’s firm disclosed a total of 13 security holdings with a portfolio value of $77,435,131 and a top 10 holdings concentration of 93.62%.
Burry wrapped up 2024 being cautiously optimistic regarding long-term prospects in terms of China’s online retail market, given ongoing regulatory and macroeconomic uncertainties in the Asian country. In the quarter ending December 31, he cut the stake in two of his top three investments in Chinese technology before the January release of DeepSeek’s latest AI models which turned tech space on its head starting a massive rally in the country’s stock market. Apart from that, it appears Burry is looking to capitalize on the growing demand for healthcare services and advanced analytical technologies, while also focusing on consumer discretionary taking positions in apparel, cosmetics, and luxury goods industries.
Our Methodology
To make the list of Michael Burry’s top portfolio holdings we reviewed Scion Asset Management’s fourth-quarter 2024 portfolio and ranked the list according to the hedge fund’s stake value in each firm. If there was an overlap, we prioritized the holding that was worth more money. We have also assessed the number of shares acquired by Scion Asset and hedge fund sentiment toward each stock from Insider Monkey’s database of hedge investor letters.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Baidu Inc (BIDU): Among Michael Burry’s Top Holdings Were Gaining While NVDA Was Crashing
A modern internet space with a person using Baidu services on a laptop.
Baidu, Inc. (NASDAQ: BIDU)
Portion of portfolio: 13.6%
Value of holdings: $10,538,750
Baidu, Inc. (NASDAQ: BIDU) a Chinese provider of online marketing and cloud services through an internet platform, saw a 2% year-over-year drop in fourth-quarter revenue to RMB34.12 billion (US$4.7 billion), exceeding analyst expectations of RMB33.32 billion (US$4.61 billion).
Burry maintained its existing position in one of its top portfolio holdings in the fourth quarter at 125,000 shares, according to a recent quarterly filing with the Securities and Exchange Commission.
While economic pressures in the country took a toll on the company’s online marketing revenues which decreased by 7% to RMB17.9 billion yuan (US$2.48 billion, Baidu’s Cloud AI business saw a rising demand for AI solutions resulting in a 26% revenue increase to RMB7.1 billion (US$983 million). On February 18, Citi analyst Alicia Yap maintained a “Buy” rating on the stock with an associated price target of $139.
Benchmark analyst Fawne Jiang reaffirmed a “Buy” rating on the stock with a steady $130.00 price target, while Bernstein analysts maintained a Market Perform rating on the stock, increasing the price target from $87.00 to $108.00, according to Investing.com.
The stock of the Beijing-based Chinese internet search giant traded at $94.47 per share after the market close on March 11, gaining 12.4% since the beginning of the year. Over the past 12 months, Baidu shares declined 6.73%. The company has a market capitalization of $33.308 billion.
As the AI race in China intensifies CEO Robin Li believes investing in cloud infrastructure is important as developing models that outsmart the competition requires greater computational power., according to Ruters.
That said, Ernie Bot, the company’s AI chatbot with premium features, will be available for free for mobile and desktop users starting April 1. Baidu, Inc. (NASDAQ: BIDU) plans to launch a next-gen AI model by June, making it open-source, like all of DeepSeek’s models.
On February 25, Baidu, Inc. (NASDAQ: BIDU) has reached an agreement with Joyy Inc. to acquire its video entertainment live streaming business in mainland China – YY Live – for a total purchase price of roughly $2.1 billion in cash.
Overall, BIDU ranks 2nd on our list of Michael Burry’s top Holdings that were gaining while NVDA was crashing. While we acknowledge the potential of BIDU as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BIDU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
