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Will Pinduoduo (PDD) be Able to Pull Off the “Late-Mover” Strategy?

Hayden Capital, an investment management firm, released its second-quarter 2024 investment letter. A copy of the letter can be downloaded here. Driven by the core positions, the portfolio rose in the past few months. The firm is currently seeing signs of market stabilization following the erratic macroeconomic environment of the past few years. In the second quarter, the portfolio generated a 7.0% return compared to a 4.3% return for the S&P 500 and a 2.9% return for the MSCI World Index. The firm’s assets are invested in Asia at approximately 57%, in North America at approximately 41%, and the remainder in cash. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.

Hayden Capital highlighted stocks like PDD Holdings Inc. (NASDAQ:PDD), in the second quarter 2024 investor letter. PDD Holdings Inc. (NASDAQ:PDD) a multinational commerce group that operates through Pinduoduo, an e-commerce platform and Temu, an online marketplace. The one-month return of PDD Holdings Inc. (NASDAQ:PDD) was -35.54%, and its shares lost 5.71% of their value over the last 52 weeks. On September 6, 2024, PDD Holdings Inc. (NASDAQ:PDD) stock closed at $92.68 per share with a market capitalization of $129.572 billion.

Hayden Capital stated the following regarding PDD Holdings Inc. (NASDAQ:PDD) in its Q2 2024 investor letter:

“PDD Holdings Inc. (NASDAQ:PDD): A few weeks ago, Latepost (a leading Chinese technology news outlet) confirmed Pinduoduo’s online grocery initiative is solidly profitable (LINK). According to the article, Duoduo Grocery is able to achieve ~5% net profit margins in competitive markets (where they go up against Meituan Select). In non-competitive markets, they can achieve ~10 – 15% net margins.

The company doesn’t disclose the exact scale of Duoduo Grocery, but our calculations indicate it’s likely around ~RMB 300BN this year, and still growing in the double-digits. At that level, the division is likely contributing ~US $2.5BN in annual profits.

It’s an impressive result, but admittedly, not a huge needle-mover in light of the total $17.6BN net profits the company is expected to make this year (~14% of overall profits)…” (Click here to read the full text)

A close-up of a customer using the company’s e-commerce platform whilst shopping online.

PDD Holdings Inc. (NASDAQ:PDD) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 86 hedge fund portfolios held PDD Holdings Inc. (NASDAQ:PDD) at the end of the second quarter which was 76 in the previous quarter. In the second quarter, PDD Holdings Inc.’s (NASDAQ:PDD) revenue increased 86% year-over-year to RMB97.1 billion. While we acknowledge the potential of PDD Holdings Inc. (NASDAQ:PDD) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed PDD Holdings Inc. (NASDAQ:PDD) and shared the list of most undervalued stocks to buy. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

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

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

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