China-based e-commerce company PDD Holdings (PDD) reported mixed Q2 2025 results. Revenue rose 7% year-over-year to ¥103.98 billion, just above estimates of ¥103.2 billion. However, higher spending to counter rising competition weighed on net profit. Following the announcement, PDD stock gained over 7% in pre-market trading as of this writing on Monday.
Claim 30% Off TipRanks
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks
For context, PDD Holdings operates discount shopping platform Pinduoduo and global marketplace Temu, focusing on affordable products.
PDD Profits Take a Hit Despite Revenue Beat
In the second quarter, PDD’s operating profit dropped 21% year-over-year to ¥25.79 billion ($3.6 billion), while net income attributable to shareholders slipped 4% to ¥30.75 billion ($4.29 billion).
The Chinese government is trying to boost local spending to revive an economy under pressure from a weak property market and trade policies from U.S. President Donald Trump. As a result, PDD has been offering heavy discounts and promotions to attract customers. While this has supported demand, it has also fueled a price war.
At the same time, low pricing in China and higher costs from U.S. tariffs on international shipping and sales have hurt PDD’s profit margins in recent quarters.
PDD’s Costs Climb in Q2
In the second quarter, PDD’s costs rose due to higher spending on fulfillment, servers, payment processing, and marketing.
Notably, management said they will keep investing in merchant support and platform improvements to drive long-term value, even though these efforts could continue to weigh on short-term profits.
Is PDD a Good Stock to Buy?
According to TipRanks, Wall Street has a Moderate Buy consensus rating on PDD stock, based on nine Buys, six holds, and one Sell assigned in the last three months. The average PDD stock price target of $124.26 implies a downside of 2.24% from the current level.
These ratings and price targets will likely change as analysts update their coverage following today’s earnings report.
