PDD Holdings Inc. (PDD): Among Michael Burry Stocks with Huge Upside Potential
We recently published a list of . In this article, we are going to take a look at where PDD Holdings Inc. (NASDAQ:PDD) stands against other Michael Burry stocks with huge upside potential.
Michael Burry, founder and manager of Scion Asset Management, is best known for predicting and profiting from the housing bubble's collapse in the mid-2000s. His bold contrarian bet was famously chronicled in the book and film 'The Big Short.' Burry's investment strategy draws heavily from the rigorous market analysis and principles outlined in Benjamin Graham and David Dodd's 1934 book 'Security Analysis.' The book championed the merits of financial statement analysis, highlighting the importance of intrinsic value and structured investment principles.
That said, Burry has never shied away from putting his own distinct stamp on Wall Street's time-tested principles. By utilizing complex financial tools, such as derivative securities and short-selling, Burry has amassed a fortune, challenging conventional market wisdom. His 2001 Scion Value Fund letter provides a fascinating insight into his contrarian outlook, which prioritizes long-term value over short-term price fluctuations. Burry makes it clear that to achieve significant long-term returns, he is willing to tolerate short-term volatility. He stated:
'I will always choose the dollar bill carrying a wildly fluctuating discount rather than the dollar bill selling for a quite stable premium.'
He also has no qualms about making significant investments in a few stocks that he believes are undervalued, a tactic the investor employed to strengthen Scion's holdings at the end of 2024.
In the quarter that ended on December 31, 2024 just before DeepSeek's artificial intelligence breakthrough sparked a $1.3 trillion surge in Chinese tech stocks, Michael Burry offloaded some of his investments in the country's tech stocks. The moves came amid a period of high volatility for Chinese stocks, when investors appeared to be losing faith in Beijing following the implementation of a stimulus package in late September. The government's actions triggered a wild rally until early October, though momentum waned due to a property crisis, a poor economic outlook, and dissatisfaction with the scope of fiscal stimulus in the following months.
For this article, we examined Scion Asset Management's Q4 2024 13F filings to list down Michael Burry's stock picks with the highest upside potential. We ranked the companies in ascending order of their upside potential. These equities are also popular among elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points ().
A close-up of a customer using the company's e-commerce platform whilst shopping online.PDD Holdings Inc. (NASDAQ:PDD) is a global commerce company that operates several businesses, including two key ventures: Pinduoduo and Temu. Pinduoduo is an e-commerce platform with a wide range of products, whereas Temu is an online marketplace that specializes in heavily discounted consumer goods.
PDD Holdings Inc. (NASDAQ:PDD) has begun implementing a strategic shift in its business strategy for Temu. The platform will now exclusively focus on goods offered by local American merchants, abandoning its previous approach of selling low-cost Chinese imports. PDD Holdings' move to adopt a 'local fulfillment' approach is expected to reduce the impact of tariffs on its operations, perhaps allowing the company to retain competitive pricing for its customers in the US.
On April 28, Citi reduced its price target for PDD Holdings Inc. (NASDAQ:PDD) from $150 to $127 while maintaining a Neutral rating. The firm anticipates the company to announce its first-quarter results by the end of May, but notes 'several uncertainties.' Citi's analyst believes that before new tariffs are implemented, there is a potential for a brief increase in US sales as customers rush to make purchases before the spike in prices. That said, Citi anticipates PDD's share price to stay within a particular range until there is additional information about how the new tariffs will influence the company's earnings.
Overall, PDD ranks 7th on our list of Michael Burry stocks with huge upside potential. While we acknowledge the potential for PDD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than PDD but trades at less than 5 times its earnings, check out our report about this .
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Disclosure: None. This article is originally published at .
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