Ark Invest; Insider
After Q2 earnings beat analyst expectations, Cathie Wood increased its stake in JD.com.
Ark Invest announced Monday that it had purchased 164,889 shares of JD.com.
Wood's investment company recently sold Chinese tech stocks after regulatory risks grew.
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Ark Invest's Cathie Wood added to its JD.com stock position Monday after strong earnings reports beat analyst expectations. This indicates that the top stock-picker is becoming more bullish about Chinese tech stocks.
JD.com's revenue increased by more than 26% to $254 billion renminbi ($39B) in the last quarter as it added 32 million users. The company's total user base increased by 27% to 531 million, an increase of 27% over the previous year.
The shares of the company, which are listed in Hong Kong, rose by nearly 10% during early trading on Tuesday while their US-listed shares rose by 8% in pre-market.
Wood may have purchased 164 889 American Depositary Receipts from JD.com Monday under ARK's Autonomous Technology & Robotics ETF, (ARKQ) because of these strong results.
JD.com was not the only tech stock that rallied in China. Others have recovered after being threatened by stricter regulations that harmed their shares. This suggests that investors have been less worried about companies' performance. Tencent and Alibaba both rose by more than 8%, while Meituan was higher than 13% Tuesday.
After Beijing's regulatory crackdown, Ark was attempting to sell off Chinese tech stocks, including JD.com. Wood's investment company had decreased its China exposure to almost zero and redeployed the cash from these stocks to Ark's highest conviction names instead.
Wood might be happy with the absence of any significant new initiatives in China's recent crackdown, however Monday's action signals that.
She stated last week that China's plans to tighten regulations conflict with its ambition to be the world's leader in innovation. She noted that the country appears to be in retreat when it concerns technological innovation. It tightly controls the use of data by tech firms.
JD.com shares that are US-listed have fallen 25% so far in this year.
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