One of last week's big winners was iQiyi (NASDAQ:IQ). Shares of China's leading streaming video provider moved 13.47% higher for the week, fueled largely by a general bounce in Chinese growth stocks. iQiyi also benefited from being tapped for a pair of prolific company lists, but it was essentially a big week for China's dot-com darlings to recover after tariffs-related weakness in recent weeks. Even a slight diss within a bullish analyst note on Baidu (NASDAQ:BIDU) couldn't hold the stock back.
Volatility has been iQiyi's middle name lately. The stock has posted moves of at least 10% in seven of the past eight weeks. Even the one week that didn't treat investors to a double-digit percentage move was still a bumpy run ending in a 7% decline. Let's face it: iQiyi as an investment is not for the faint of heart.
Making the grade
The week was kicked off by iQiyi being named as one of China's New Economy Top 20 Brands at Economic View's New Economy Forum, the financial media division of China News Services. iQiyi would then be added to Fortune China 500 list. The accolades are nice, but validation by mainstream financial journos isn't typically the kind of stuff that moves stock.
iQiyi was simply bouncing back after three weeks of declines, shedding a little more than a quarter of its value in the process. To be fair, the stock had exactly doubled in the course of the four previous weeks. Don't let anyone tell you that iQiyi isn't a bucking bronco.
It wasn't necessarily a great week for iQiyi on the news front beyond the two media accolades. Chinese stocks took a mid-week dip after the Trump administration threatened $200 billion in new trade sanctions, but the market darlings recovered the following trading day. Then we had the potential fallout of the Baidu analyst upgrade.
KeyBanc's Hans Chung boosted his rating on Baidu to overweight, but the upgrade offered some thoughts on Baidu spinoff iQiyi that weren't as bullish. Chung feels that global interest in the World Cup could result in Chinese viewers spending less time on iQiyi. He also took a more conservative stance in the favorable impact that iQiyi's partnership with e-commerce juggernaut JD.com is having on overall premium subscriber growth at iQiyi.
Bulls clearly got the better of the bears last week, though time will tell if the tide is turning back in favor of those long the stock or if this was simply a chance for the shares to exhale after three weeks of big declines. Investors will have to wait until later this month to see if iQiyi can repeat the feat of delivering another blowout quarter the way it did in late April, but we already know that the stock will be volatile long before the fresh financials hit the wire. iQiyi swings, and despite the ups and downs it remains a market darling that has nearly doubled since its IPO four months ago.