JD.com (JD Quick QuoteJD - Free Report) and PDD Holdings (PDD Quick QuotePDD - Free Report) stand as two formidable players in China's dynamic e-commerce landscape, each carving distinct paths toward growth while competing for investor attention. Both companies share roots in the world's largest e-commerce market, yet their strategies diverge significantly — JD.com champions a capital-intensive logistics infrastructure approach while PDD Holdings leverages its innovative social commerce model and aggressive international expansion through Temu. With both stocks trading at historically discounted valuations amid China's economic uncertainties and intensifying competition, investors face a critical decision about which platform offers superior growth potential.

The timing for this comparison couldn't be more crucial as both companies navigate regulatory pressures, shifting consumer preferences, and strategic pivots that will define their trajectories through 2025 and beyond. Let's delve deep and closely compare the fundamentals of the two stocks to determine which one is a better investment now.

The Case for JD Stock

JD.com's second-quarter 2025 results revealed a company in transition, posting robust revenue growth of 22.4% year over year to RMB356.7 billion while experiencing margin compression that signals both opportunity and challenge. The company's strategic focus on supply chain excellence remains its cornerstone, with more than 900,000 employees across its ecosystem and plans to add 35,000 new positions through campus recruitment, demonstrating a commitment to long-term infrastructure development. Management's emphasis on operational efficiency has yielded 13 consecutive quarters of gross margin improvement, though net income declined to RMB6.2 billion from RMB12.6 billion year over year, reflecting intensified investments in new initiatives, including food delivery services that posted 199% revenue growth.

The company's technological ambitions center on embodied AI and advanced logistics automation, with investments exceeding RMB1 billion in robotics startups and the launch of Joy Industrial, its AI-powered supply chain platform managing over 57 million SKUs. JD Logistics operates more than 40 intelligent logistics parks utilizing AI-powered scheduling robots and autonomous delivery vehicles, achieving inventory turnover of approximately 30 days despite managing 10 million self-operated SKUs. However, fulfillment expenses continue to pressure margins at 6.5% of revenues, while the company burns through cash for share buybacks —repurchasing $1.5 billion worth of shares in the first half of 2025 under its $5 billion program, raising questions about capital allocation priorities amid profitability challenges.

For 2025, the consensus mark for earnings is pinned at $2.68 per share, suggesting 37.09% decline from 2024.

The Case for PDD Stock

PDD Holdings emerges as a compelling growth story despite short-term profitability headwinds, with its second-quarter 2025 results showcasing the company's unwavering commitment to long-term ecosystem development and market dominance. Revenues reached RMB103.98 billion, representing 7% year-over-year growth — a deceleration that management attributes to strategic investments rather than fundamental weakness. The company's bold RMB100 billion merchant support program demonstrates confidence in its platform's future, prioritizing small and medium-sized merchant success over immediate profit maximization. This strategic sacrifice positions PDD to capture disproportionate market share as competitors struggle to match its merchant-friendly ecosystem and innovative C2M (consumer-to-manufacturer) model that revolutionizes supply chain efficiency.

PDD's international expansion through Temu represents a transformative growth vector, rapidly establishing the platform among the West's most popular shopping apps while leveraging China's manufacturing advantages to offer unbeatable prices globally. The company maintains exceptional financial flexibility with RMB365 billion in cash reserves against just RMB11.3 billion in debt, providing ammunition for sustained investment in AI capabilities, logistics infrastructure, and market expansion without compromising its balance sheet strength. Management's focus on building sustainable competitive advantages through technology innovation and ecosystem development reflects mature strategic thinking, with the platform already integrating AI-powered recommendation engines and exploring partnerships to enhance personalization capabilities that drive user engagement and transaction frequency.

The Zacks Consensus Estimate for 2025 earnings is pegged at $9.62 per share, indicating 15.02% year-over-year decline.

Valuation and Price Performance Comparison

Both JD.com and PDD Holdings present remarkably discounted valuations that reflect market skepticism rather than fundamental deterioration. JD.com trades at a forward P/E of 10.53x, representing a steep discount to the industry average of 25.51x. Meanwhile, PDD Holdings commands a slightly higher trailing P/E of 11.87x, yet this premium is entirely justified given its superior growth trajectory and stronger profitability metrics despite recent strategic investments.

JD’s Valuation is More Attractive Than PDD Holdings

Image Source: Zacks Investment Research

Year-to-date performance tells a divergent story — PDD shares have gained 38.4% while JD stock has returned 1.7%, highlighting market preference for PDD's growth narrative despite margin pressures. While JD offers seemingly better value metrics, this discount reflects genuine concerns about JD's ability to compete effectively amid intensifying competition and strategic missteps in food delivery. PDD's valuation, though not cheap in absolute terms, remains justified by its market position, international expansion success, and demonstrated ability to innovate in ways that disrupt traditional e-commerce models.

JD Underperforms PDD, Sector YTD

Image Source: Zacks Investment Research

Conclusion

PDD Holdings emerges as the superior investment opportunity, offering investors exposure to transformative growth drivers that JD.com simply cannot match. PDD's innovative social commerce model, successful international expansion through Temu, superior financial flexibility with minimal debt, and strategic willingness to invest in long-term ecosystem development position it for sustained outperformance. The company's AI initiatives, though less publicized than JD's robotics investments, focus on practical applications that enhance user experience and merchant success.

While JD.com struggles with margin compression, cash burn from unprofitable ventures, and intensifying competition from both PDD and Alibaba, PDD's strategic sacrifices today lay the groundwork for tomorrow's dominance. PDD's discounted valuation represents a rare opportunity to acquire a growth leader at reasonable multiples. Investors should buy PDD stock to capitalize on its international expansion and platform innovation, while adopting a wait-and-see approach with JD.com until clearer evidence emerges of its ability to monetize massive infrastructure investments and reverse market share losses. PDD sports a Rank #1 (Strong Buy) and JD carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.