Cathie Wood’s ARK Invest ETFs (exchange-traded funds) made several notable portfolio adjustments on Wednesday, September 24, according to daily fund disclosures. The ace hedge fund manager trimmed the stake in Advanced Micro Devices (AMD) while continuing to build positions in Chinese tech giants Alibaba (BABA) and Baidu (BIDU).
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Wood Sells AMD Stock
The most notable transaction on Wednesday was the sale of 138,432 AMD shares, worth about $22.3 million, by the ARK Innovation ETF (ARKK).
The sale of AMD stock by Wood’s ARKK ETF comes at a time when there are concerns about rising competition in the chip space, especially after Nvidia (NVDA) announced a $5 billion investment in troubled chipmaker Intel (INTC) and a $100 billion investment in OpenAI. Additionally, rival Broadcom (AVGO) announced a $10 billion order from a new customer, reflecting robust demand for its AI custom chips.
Is AMD Stock a Buy or Sell?
Currently, Wall Street is cautiously optimistic on AMD stock, with a Moderate Buy consensus rating based on 21 Buys and 13 Holds. The average AMD stock price target of $187.73 indicates about 17% upside potential. AMD stock has declined 4% over the past month, but is up more than 33% year-to-date.
Additionally, ARKK ETF continued to trim its stake in AI-powered healthcare technology company Tempus AI (TEM). Yesterday, ARKK sold 45,299 TEM shares, worth $3.81 million. There have been concerns about Tempus AI stock’s valuation following a 135% rally so far this year.
Wood Builds Positions in Chinese Stocks
Wood continues to build positions in Chinese technology companies. AI-led growth potential appears to be driving renewed interest in Chinese stocks. It is worth noting that ARK ETFs sold almost all their holdings in Chinese stocks in 2021 amid a regulatory crackdown on the tech sector.
On Wednesday, the ARKK ETF purchased 63,231 shares of Chinese e-commerce and cloud computing giant Alibaba, valued at $10.3 million. Additionally, the ARKK ETF bought 82,913 shares of internet company Baidu, worth about $10.4 million. These transactions follow significant purchases of Chinese stocks made on Monday.
Wall Street’s Take on BABA and BIDU Stocks
Currently, Wall Street has a Strong Buy consensus rating on Alibaba stock, with the average price target of $171.04 indicating a 3.1% downside risk. Meanwhile, Baidu stock scores a Moderate Buy consensus rating, with the average price target of $118.24 suggesting a 11% possible downside from current levels.
BABA stock has rallied 108% year-to-date, while BIDU stock is up 58% over the same period.
