Here Is What You Need To Know Before Investing In PDD Holdings Inc. (PDD)

PDD Holdings Inc. (NASDAQ:PDD) is among the 13 Best Global Stocks to Buy Right Now. The multinational commerce group owns and operates a portfolio of businesses.

The Temu-owner reported a 10% year-over-year increase in revenue for the first quarter of fiscal 2025. However, net income declined 47%, driven by intense local competition and ongoing global trade uncertainties. MScience analyst Vinci Zhang said the bottom-line miss was a result of weaker-than-anticipated operating margin, likely impacted by U.S. tariffs.

Slowing domestic spending and a prolonged property crisis in China have also pressured PDD Holdings Inc. (NASDAQ:PDD)’s Pinduoduo, which generally tends to outperform competitors due to its low-price focus.

The Chinese e-commerce giant also made substantial investments in its platform ecosystem to support consumers and merchants. PDD Holdings Inc. (NASDAQ:PDD)’s Chairman and Co-CEO Lei Chen said that while these investments weighed on near-term profitability, they have strengthened the long-term health of the platform.

Despite the dip in profitability during the first quarter, the market sentiment on PDD Holdings Inc. (NASDAQ:PDD) remains bullish, with year-to-date returns of 22% as of the close of business on July 22. Wall Street analysts have a consensus Buy rating for the stock, with a one-year average price target of $127, representing a 10% upside potential.

While we acknowledge the potential of PDD as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.