Cathie Wood started the new shopping week with an active shopping list. Ark Invest’s CEO, co-founder and Ace stock picker boosted her stake by seven on Monday. She’s also done a fair bit of selling, but let’s focus on the inside, not the outside, of her family of exchange-traded funds.
Wood increased its stake Taiwan Semiconductor Manufacturing(NYSE: TSM), Baidu(NASDAQ: HOME)and Pony to(NASDAQ: PONY) on Monday. Let’s take a closer look.
Taiwan Semiconductor may be the least known of the eight stocks with a market cap north of $1.5 trillion. That doesn’t make it any less important. The world’s largest foundry ignores the gravity of its market’s historical cyclicality. Investing in TSMC is a refreshing mix of contrasts.
Revenue is up 18% year-on-year for the fifth time in the last six years. Zoom in and the growth will improve. TSMC has posted six straight quarters of year-over-year growth of 30% or more. Don’t expect the industry pioneer to stretch its streak to seven quarters.
Image source: Getty Images.
TSMC reported on Monday that October revenue rose 17%, the weakest growth in 18 months. It raised its full-year guidance, but analysts see fourth-quarter revenue growth in the mid-to-high range.
The founder of the foundry will do well. Despite operating in a business that some mistakenly classify as a commodity, TSMC has enjoyed 21 consecutive years of net margins above 30%. In the most recent quarter, investors earned a net margin of 45.7%, the highest in three years. That means for every $100 in revenue in the three months ending in September, a whopping $45.70 went to the bottom line.
It’s probably not fair to say that Baidu is an artificial intelligence (AI) stock that no one is talking about anymore. Price of China’s Leading Search Engine in 2025 will rise 57 percent, with high momentum fueled by Baidu’s prospects of ramping up part of its AI business amid a new trade restriction with U.S. companies and China’s own appetite for AI technology solutions.
Deutsche Bank became the latest Wall Street firm to upgrade shares to hold on Friday. Analyst Leo Chiang believes Baidu is emerging as an artificial intelligence leader in China thanks to its cloud computing and robotics efforts. Baidu’s push into artificial intelligence chips could soon become a major needle mover.
Despite all the hype and hype, Baidu trades at just 12 times trailing earnings. It’s not a perfect situation. Her flagship business is meandering. Annual revenue is expected to decline slightly this year, which has occurred in two of the past three years. But with great profitability comes great opportunity. I like Wood’s return to Baidu here.
We finally have an investment with this trendy new stock scent. Pony AI has been public for almost a year. This makes progress in the competitive race to commercialize autonomous driving. It is a major player in China, but it was founded in California nine years ago.
Pony AI is not profitable, and its revenue growth has been yawn-worthy. But it’s hitting benchmarks around the world, and investors are starting to take notice. Shares may be trading just above the $13 IPO price at the end of last November, but it’s been a volatile year. Since going public, the stock has traded between $4.11 and $24.92.
Expectations are high. Analysts expect revenue to grow faster next year and to double its business in each of the three subsequent years. This unlikely head-turner, with less than $86 million in revenue USD, until 2029 should exceed 1 billion
Before buying Taiwan semiconductor stocks, consider the following:
The Motley Fool Stock Advisor a team of analysts has just identified what they think is Top 10 promotions for investors to buy now… and Taiwanese semiconductor manufacturing was not one of them. The 10 stocks that made the cut could yield huge returns in the coming years.
Consider when Netflix you made this list in 2004 December 17th… if you invested $1,000 during our referral, you would have $604,044!* Or when Nvidia you made this list in 2005 April 15th… if you invested $1,000 at the time of our referral, you would have $1,220,149!*
Now it’s worth mentioning Stock advisor the total average return is 1,064%, a market-crushing advantage over the S&P 500’s 194%. Don’t miss the latest top 10 list you can find Stock advisorand join an investment community built by individual investors for individual investors.
View 10 promotions »
*Stock Advisor returns 2025 November 10
Rick Munarriz has a position at Baidu. The Motley Fool has positions and recommends Baidu and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
Cathie Wood looks for deals: 3 stocks she just bought was originally published by The Motley Fool
