CMB International Securities Maintains Buy Rating on PDD Holdings (PDD) Stock

PDD Holdings Inc. (NASDAQ:PDD) is one of the Best Consumer Cyclical Stocks to Buy According to Hedge Funds. On August 26, CMB International Securities analyst Saiyi He maintained a “Buy” rating on the company’s stock and set a price objective of $146.30. The analyst’s rating is backed by a combination of factors, mainly due to PDD Holdings Inc. (NASDAQ:PDD)’s better-than-expected financial performance. Its revenue growth, although modest, remained in line with projections, while cost savings in sales and marketing expenses resulted in a stronger operating profit than expected.

Despite the challenges resulting from the changes in the US policy and a competitive market, PDD Holdings Inc. (NASDAQ:PDD) demonstrated resilience via strategic investments targeted at enhancing the platform ecosystem and supply quality. In Q2 2025, PDD Holdings Inc. (NASDAQ:PDD) saw total revenues of RMB103,984.8 million (US$14,515.7 million), reflecting 7% growth YoY. This stemmed mainly from higher revenues from online marketing services and transaction services.

GreenWood Investors, an investment management company, released its Q4 2025 investor letter. Here is what the fund said:

“Aside from transitory foreign exchange translation losses (as opposed to trading losses), the two other notable detractors from our portfolio were MEI Pharma and PDD Holdings Inc. (NASDAQ:PDD) in 2024.

PDD Holdings founder Colin Huang is who inspired us to “run 3x faster,” as the relentless corporate culture of PDD has built an e-commerce company with roughly the same GMV (gross merchandise value) of Amazon in one-third the time it took Amazon to build itself. Shares reacted negatively when the company decided to reinvest its record margins into even faster growth and creating a healthier supplier ecosystem. As it looks set to create a second Amazon with its international site Temu, we are highly attracted to the opportunity. Sales are growing 4x faster than Amazon’s, yet shares are priced at less than a quarter of the Amazon earnings multiple.

PDD is a perfect example of why we want to look outside of the “Big Ten” companies that are nearly a third of global market indices. We would not want to compete with the demanding corporate culture of PDD and Temu. Its operating model is relentless at identifying efficiency throughout the manufacturing and selling supply chain. Not only is it a mor formidable competitor than Amazon, and growing much faster, but the valuation is 4x more attractive than Amazon’s…” (Click here to read the full text)

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. This article is originally published at Insider Monkey.