Is PDD Stock a Buy, Sell, or Hold in September 2025?

PDD Holdings (PDD) has become the talk of the e-commerce world, operating China’s Pinduoduo and the fast-rising global disruptor Temu. Its latest earnings beat gave Wall Street something to cheer about, lifting shares to year-to-date (YTD) highs despite an uneasy backdrop of weak consumer demand and intensifying trade headwinds.

But scratch beneath the surface, and the picture is not as simple. Profits slipped, weighed down by massive spending to fend off rivals, subsidize merchants, and fuel international expansion — all while tariffs and price wars keep biting. From Beijing’s push to revive spending to U.S. tariffs driving up logistics costs, PDD is taking big risks in rough waters that could either cement its dominance or erode near-term returns.

Management has already cautioned that these investments will create choppiness in financials, with mounting pressure in the near term as competition intensifies. With the calendar about to flip to September, does PDD stock deserve a spot in an investor’s portfolio? Or should investors sit tight — or even quietly cash out?

PDD Holdings — founded in 2015 and headquartered in Dublin Ireland — has rapidly evolved from a discount marketplace into China’s third-largest e-commerce powerhouse. Known for Pinduoduo’s low-cost shopping model and Temu’s explosive global expansion, PDD disrupted the market by connecting farmers, merchants, and consumers directly. Rising faster than giants like Alibaba (BABA) and JD.com (JD), PDD has turned aggressive expansion and sharp pricing into its signature edge in the global retail game. Its market capitalization currently stands at $170 billion.

PDD stock has staged a dramatic turnaround this year. After bottoming at $87.11 in April, the stock has ripped 40% off the lows and is up 26% year-to-date (YTD), breaking past the $120 mark in August and holding above it since last week. It tapped a YTD high of $133.33 after blowout second-quarter results before cooling off on management’s cautious tone.

In terms of valuation, PDD stock is priced at 16.2 times forward adjusted earnings, sitting below industry peers and its historical median, signaling the market has not fully priced in its ambitious growth story yet.

PDD Holdings delivered a mixed bag in its second-quarter results, weaving a story of solid growth and rising pressure in an increasingly cutthroat e-commerce arena. In Q2, the company reported revenue of RMB 103.98 billion ($14.52 billion), up 7% year-over-year (YOY) and slightly ahead of expectations. The top-line growth was driven by a 13% increase in online marketing services. Meanwhile, adjusted earnings of RMB 22.07 per ADS ($3.08), although down 5% annually, comfortably exceeded analyst estimates.

Shares rallied on the beat, but beneath the surface, the story was slightly complex. The top-line growth was the slowest in nearly four years. Plus, non-GAAP operating profit plunged 21% YOY to RMB 27.7 billion ($3.9 billion), while non-GAAP net income slipped 5% annually to RMB 32.7 billion ($4.6 billion) as PDD funneled billions into merchant support, marketing, and supply-chain investments. Adding to investor concerns, net cash generated from operating activities nearly halved to RMB 21.6 billion ($3 billion), mainly due to lower net income and changes in working capital.

Despite this, PDD’s liquidity position remains strong, with cash, equivalents, and short-term investments rising to RMB 387.1 billion ($54 billion) from RMB 331.6 billion as of Dec. 31, 2024, giving the company ample firepower to sustain heavy investments.

Management acknowledged intensifying competition, forcing PDD to double down on promotions and subsidies to retain users and merchants. Temu, its fast-growing international arm, is pivoting to a “fully-managed” model, giving PDD greater control over pricing, product curation, and logistics to compete with giants like Amazon’s (AMZN) scale and bargaining power.

Looking ahead, management signaled profit volatility as heavy investments continue. While China’s consumer market shows resilience, rising platform-switching behavior and regulatory uncertainties add pressure. Pro-consumption policies and online retail penetration remain strong tailwinds, but the industry’s structure is shifting fast.

PDD’s strategy — sacrificing short-term margins to expand its merchant ecosystem and drive consumer savings — reflects its intent to secure long-term dominance. Yet, with escalating competition, global economic uncertainties, and supply-chain risks, sustaining this balance won’t be easy.

Analysts monitoring PDD expect its EPS to decline 27% annually to $7.63 this year, before rebounding by 33% to $10.16 in fiscal 2026.

Analysts remain divided on PDD stock after yesterday’s, painting a picture of optimism tempered by a dash of caution. Jefferies analyst Thomas Chong struck an upbeat tone, raising his price target to $146 from $121 while keeping a “Buy” rating. Chong believes PDD’s RMB 100 billion merchant support program will fuel global expansion and build customer trust, positioning Temu to deepen its international reach.

Morgan Stanley also acknowledged the “notable” profit beat despite in-line revenue, viewing the results as a sign of operational strength.

Macquarie analyst Ellie Jiang sounded even more bullish, lifting the target to $165 from $126 and maintaining an “Outperform” rating. Jiang called the results “better-than-feared,” considering intense domestic competition and Temu’s geopolitical hurdles, suggesting PDD has showcased impressive cost flexibility amid turbulence. Yet, the analyst warned that the steep intraday swings following management’s “unsustained profitability” comments reflected investor concerns around transparency and heavy ongoing investments.

The consensus rating on PDD stock remains at a “Moderate Buy” based on 18 analysts covering shares. Among them, 10 recommend a “Strong Buy,” while the remaining eight analysts advise a “Hold” rating.

PDD stock has a mean price target of $140.68, implying 15% upside potential from here. The Street-high call of $170 hints at a potential 38% rally from current levels.

On the date of publication, Sristi Suman Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com