10 Cheap Internet Stocks to Buy According to Hedge Funds

2. JD.Com, Inc. (NASDAQ:JD)

Forward P/E: 9.12

Number of Hedge Fund Holders: 78

JD.Com, Inc. (NASDAQ:JD) is an e-commerce company that deals with online retail and online marketplace through its retail website and mobile application. Its operations are divided into four segments: JD Retail, JD Logistics, Dada, and New Businesses segment. The JD Retail segment is engaged in online retail, marketing services, and online marketplace in China, while the JD Logistics segment covers internal and external logistics businesses. The Dada segment operates as a local on-demand delivery and retail platform in China. The New Businesses segment, in contrast, manages JD Property, Jingxi, and overseas businesses.

The company is expanding its JD Logistics segment globally, as it is a significant component of JD.Com, Inc.’s (NASDAQ:JD) overall success. It is doubling its warehouse capacity by 2025 and is focusing investments on AI and automation to boost efficiency and streamline customer experience. These technologies include 5G-powered smart logistics parks and intelligent warehousing systems.

In addition to this segment, JD.Com, Inc. (NASDAQ:JD) has strong overall operations. For fiscal Q4 2024, the company reported net revenues of around $147.5 billion, reflecting a 13.4% increase from fiscal Q4 2023. Net revenues for the full year 2024 reached $158.8 billion, an increase of 6.8% from the full year of 2023.

Ariel Global Fund is highly positive on the company due to its strong performance driven by Chinese stimulus, improved consumer spending, successful diversification strategies, and the ability to capitalize on growth opportunities like home appliance trade-in programs. It stated the following regarding JD.Com Inc. (NASDAQ:JD) in its Q3 2024 investor letter:

“China-based E-commerce company, JD.com, Inc. (NASDAQ:JD) was the top contributor in the quarter as the People’s Bank of China’s (PBOC) comprehensive stimulus measures bolstered investor confidence in the Chinese economy. The improving economic sentiment is fueling consumer spending, which benefits the company’s retail operations. Additionally, the company’s strategic decision to diversify general merchandise product offerings, expand its third-party marketplace business and monetize advertising streams has contributed to consecutive quarterly earnings beats. JD.com is also poised to capitalize on the home appliance trade-in program, which is one of its largest product categories. Given the favorable market environment, the company’s strategic positioning, and supply chain efficiency improvements, we continue to like its long-term growth prospects.”