Alibaba Vs. PDD: A Grim Showdown In Chinese E-Commerce Stocks

Alibaba Group Holding Ltd BABA BABAF and PDD Holdings Inc PDD were once the shining stars of China's e-commerce universe, but recent performance metrics suggest they're caught in a gravitational pull downward.

Let's dive into the tale of two stocks that seem to be competing for the title of ‘most bearish trend.’

Alibaba: The Resilient Underdog?

Alibaba's stock, at $86.73, has weathered a mix of optimism and anxiety. It's up 12.12% over the past year, but the last month saw a sharp 13.01% decline.

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Technically, the stock screams ‘bearish’ as it lingers below key moving averages, including its 20-day and 50-day simple moving averages (SMAs). Yet, with its eight-day SMA at $86.18 and 200-day SMA at $82.52, there's a faint glimmer of hope—potential buyers might find solace in its nearly oversold RSI of 38.51.

Investor sentiment remains tepid, but big names like Soros Capital Management and Bridgewater Associates are quietly building stakes. Is Alibaba the beaten-down stock that contrarians love to bet on?

Maybe, but upcoming U.S. tariffs could spoil the progress.

Read Also: Alibaba Reshapes E-Commerce Operations, Names Jiang Fan as Unit CEO

PDD Holdings: The High-Flyer Turned Free-Faller

PDD's stock paints a darker picture. After a blistering run with Temu's U.S. expansion, the company now faces an aggressive sell-off.

Down 33.22% over six months and 20.52% in the past month, it seems Wall Street is questioning the sustainability of Temu's discount-driven strategy.

Chart created using Benzinga Pro

Technical indicators are grim, with the MACD at a negative 6.18 and an RSI of 28.79 signaling oversold territory.

Even institutional love, like Fisher Asset Management upping its stake, hasn't stopped analysts from jumping ship.

JPMorgan downgraded PDD to neutral with a slashed price target of $105, while Benchmark trimmed its target to $160 from $185.

Meanwhile, fears over regulatory risks and national security concerns tied to Temu only add to the bearish momentum.

The Verdict: Avoid Or Opportunistic Entry?

Both stocks are under pressure, but PDD's steeper declines and bearish outlook suggest it's in a riskier position.

Alibaba, with its diversified revenue streams and slightly less dramatic drop, might hold more appeal for the brave.

Still, with Trump-era tariffs looming, both stocks might have more turbulence ahead. For now, it's about ‘who's losing less badly,’ and neither is doing well.

Read Next:

• The Fall of Ant Group’s IPO: Alibaba’s Missteps, Legal Battles, and a $433.5M Settlement