Tesla and Baidu: Cathie Wood’s Fallen Stars Ready for a Stellar Rebound

The market is in a state of flux, and Cathie Wood’s ARK Invest portfolio isn’t immune to the volatility. But here’s the thing: When visionary investors like Wood double down on their bets during a downturn, it’s a signal to pay attention. Let’s dive into two of her top holdings—Tesla (TSLA) and Baidu (BIDU)—both down over 20% from their highs, and why now could be the time to buy the dip before these stocks soar again.

Tesla: The Electric Vehicle Titan’s Rocky Road—and Why It’s Still a Buy

Tesla’s stock has been a rollercoaster in 2025, plunging 31% year-to-date amid political headwinds, competition from Ford and Rivian, and concerns about Elon Musk’s influence. But here’s why this is a buying opportunity:

• Market Share and Innovation: Tesla still dominates the EV market, with 24% of global EV sales in Q1 2025. Musk’s gambles—whether it’s the Cybertruck or AI-driven Autopilot—are risky, but they’ve paid off time and again.
• Cathie’s Conviction: Wood’s ARK has been a Tesla stalwart for over a decade. She’s called it a “platform play” with software revenue potential that could eclipse its car sales.

The chart shows a steep decline in early 2025, but the lows hit in late 2022 and 2023 were far worse. This isn’t a death spiral—it’s a correction.

Baidu: The AI Play with a China Twist

Baidu’s stock has dropped 20.8% from its 52-week high, dragged down by U.S.-China tensions and regulatory clouds over its AI ambitions. Yet Baidu’s Ernie large language models and autonomous driving platform Apollo Go are game-changers.

• AI Dominance: Baidu’s Ernie 4.0 model outperforms many rivals in natural language tasks, and Apollo Go has secured 1,000+ autonomous ride-hailing permits in China.
• Valuation Check: At a trailing P/E of 10x and forward P/E of 12.5x, Baidu is dirt-cheap compared to U.S. tech peers.

The gap here is the buying opportunity. When geopolitical storms pass—and they always do—Baidu’s AI could power a rebound.

Why Now? The ARK Playbook in Action

Cathie Wood’s mantra is “buy the dip in disruptive innovation.” ARK’s flagship ETF (ARKK) is down nearly 20% in 2025, but that’s part of the volatility you expect with high-growth stocks.

• Tesla’s Tipping Point: Musk’s recent focus on cutting costs and speeding up production could stabilize the stock. Analysts still see 25% upside from current levels by year-end.
• Baidu’s Catalysts: A thaw in U.S.-China trade relations or a major AI partnership (think Microsoft’s OpenAI deal) could send Baidu’s shares skyward.

Conclusion: The Dip Isn’t a Death Sentence—It’s a Discount

Tesla and Baidu are the poster children for Wood’s “buy the dip” strategy. Both face real risks—Musk’s controversies, China’s regulatory whims—but their core strengths are undeniable.

The numbers back this:
- Tesla’s $2.3 billion in Q1 software revenue shows its ecosystem is thriving.
- Baidu’s $1.2 billion in AI cloud revenue (up 40% YoY) proves demand is real.

If you’re in for the long game, now’s the time to load up. Cathie Wood isn’t scared—why should you be?

Final Call to Action: These stocks aren’t just down—they’re discounted disruptors. Add them to your watchlist and pull the trigger when fear hits its peak. This could be the bottom.

Investing is about timing, guts, and knowing when to bet on the future. These two stocks? They’re screaming for a comeback.