On May 15, Bridgewater Associates was one of many hedge funds and major investment players to go public with its latest Q1 13-F filing. At the helm of this financial juggernaut is Ray Dalio, the celebrated investor and co-chief investment officer, who appeared to make a high-conviction bet on the Chinese market with his fund's latest buys.

Leading the charge was Alibaba Group Holding Limited (BABA). At the end of 2024, Bridgewater’s stake in the Chinese e-commerce titan stood at $21.6 million. But by the close of Q1 2025, that position ballooned by 3,361%, reaching close to $727 million.

Trailing closely was Baidu, Inc. (BIDU), another Chinese heavyweight. Bridgewater boosted its BIDU stock holdings from $16.5 million to $191 million, a meteoric rise of 1,053%. With such seismic shifts, let's see if these high-conviction bets by Dalio's funds could could pay off.

Stock #1: Alibaba Group Holding Limited (BABA)

Alibaba Group Holding Limited (BABA), based in Hangzhou, China, is a tech conglomerate with interests in everything from logistics and food delivery to cloud computing and artificial intelligence (AI). Anchored by its core platforms, Alibaba.com, Taobao, and Tmall, the group has grown into a $295.8 billion giant.

In 2025, the stock market seems to be waking up to BABA’s quiet transformation. Year-to-date, BABA shares have surged 46.3%, with a healthy 16.2% gain just over the past month. Along with this price performance, shareholders pocket an annualized dividend of $0.66, offering a 0.53% yield.

At these levels, BABA currently trades at 12.21 times forward adjusted earnings. That is not only lower than the industry average, but also below its own five-year average multiple. For investors, this discounted valuation might just be the green light to get in.

Alibaba’s recent financial disclosure adds further texture to the story. On May 5, Alibaba posted its fiscal Q4 2025 earnings. Revenue came in at $32.6 billion, up 6.6% year over year, although slightly below expectations.

Customer management revenue for Taobao and Tmall rose 11.8% thanks to better take rates. International digital commerce grew 22.3%, showing strength in cross-border trade. Even cloud and AI, grouped under Cloud Intelligence, saw revenue jump 17.7%. Adjusted earnings improved 23% from the prior year to $1.73, though it fell shy of market forecasts.

Investor confidence in Alibaba has taken a major leap. Dalio's Bridgewater Associates boosted its stake in the company by 3,360% during a time of high volatility in U.S.-China trade relations, which has created significant market swings. Alibaba’s focus on AI and international growth positions it well to benefit if a more robust trade deal materializes.

Analysts expect Alibaba’s EPS to increase 7.4% to $2.49 in the first quarter of 2026. For the full fiscal year 2026, they forecast EPS to rise 11.8% year over year, reaching $10.15.

Analyst sentiment skews overwhelmingly bullish with an overall rating of “Strong Buy” from all 20 analysts covering the stock. The average price target of $158.20 represents potential upside of 28.1%, while the Street-high target of $190 signals a possible surge of 53.8% from current levels.

Stock #2: Baidu, Inc. (BIDU)

Baidu, Inc. (BIDU), headquartered in Beijing, operates primarily through Baidu Online Network Technology, delivering a leading Chinese language search platform. The company’s footprint extends beyond China, offering Japanese search services that include web, image, video, and blog searches.

With a market cap of $30.8 billion, BIDU stock has shed 20% over the past 52 weeks, but recovered to gain 6% so far on a year-to-date basis.

Currently, BIDU shares trade at 8.61 times forward adjusted earnings, which is below both the industry average and its own five-year average multiple. While this depressed valuation is due in part to the stock's underperformance, it could also be an entry point for investors who - like Dalio - believe in the growth story for BIDU.

On Feb 18, Baidu announced its fourth-quarter results for 2024. Revenue dipped 2% year over year, settling at $4.7 billion, yet still came in above the $4.6 billion consensus estimate. Digging deeper, Baidu’s core revenue rose 1% year over year to $3.80 billion.

AI Cloud services powered an impressive 18% jump in non-online marketing revenue, which helped offset a 7% decline in online marketing or advertising revenue. Baidu’s adjusted EPS came in at $2.63, a 12.3% decline from the prior year, but surpassed the consensus estimate of $1.97.

In addition, the company’s investments are bearing fruit, especially in technology and mobility. Baidu’s ERNIE chatbot processed roughly 1.65 billion API calls in December, with external API calls rising 178% quarter over quarter. Apollo Go, Baidu’s robotaxi service, logged over 1.1 million rides in the fourth quarter, soaring 216% year over year and increasing 83% from the prior quarter.

Looking forward, Baidu plans to release its first-quarter 2025 results on Wednesday, May 21, before U.S. markets open. Analysts anticipate a 44.9% year-over-year drop in EPS to $1.34 for the quarter. For fiscal year 2025, EPS is expected to decline 8% to $8.14, before recovering 16.8% to $9.51 in fiscal 2026.

The stock carries a “Moderate Buy” rating overall. Of 17 analysts covering BIDU, nine recommend a “Strong Buy,” while eight maintain a cautious “Hold.”

The average price target of $108.69 represents potential upside of 21.6%. The Street-high target of $142 points to a possible rally of 58.9% from current levels.