Bank of America Securities Reiterates a Hold Rating on PDD Holdings (PDD)

PDD Holdings Inc. (NASDAQ:PDD) is one of the top most undervalued low volatility stocks to buy now. Analyst Joyce Ju from Bank of America Securities reiterated a Hold rating on PDD Holdings Inc. (NASDAQ:PDD) on August 26, but raised the price target to $141.00 from $120.00.

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The analyst told investors that while PDD Holdings Inc.’s (NASDAQ:PDD) Q2 results surpassed expectations with a notable profit beat, concerns regarding the sustainability of the profits exist.

Management partly attributed the company’s solid performance to high seasonality, stating that it expects profitability fluctuations in the near term with continued heavy investments in merchant support and ecosystem upgrades by PDD Holdings Inc. (NASDAQ:PDD).

The analyst added that despite rapid overseas expansion and continued domestic market share gain, uncertainties such as competitive pressures and near-term margin expansion warrant a cautious outlook for PDD Holdings Inc. (NASDAQ:PDD).

PDD Holdings Inc. (NASDAQ:PDD) is a Chinese multinational online commerce group and retailer that owns and operates a range of diverse businesses. It also has a strong logistics, sourcing, and fulfillment capabilities network that supports its operations.

The company owns Pinduoduo, a popular online commerce platform in China, and also runs the fast-growing e-commerce marketplace Temu. Temu now operates in more than 50 countries worldwide.

While we acknowledge the potential of PDD to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than PDD and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.