10 Most Profitable Tech Stocks to Buy Now

7. PDD Holdings (NASDAQ:PDD)

TTM Net Income: $15.0 billion

Number of hedge funds: 78

PDD Holdings (NASDAQ:PDD) is a multinational commerce group that owns and operates a portfolio of businesses. Its major e-commerce offerings are Pinduoduo platform and the Temu platform. The company commands operating and net profit margin of around 28%.

In their Q4 2024 investor letter, the investment management company GreenWood Investors highlighted PDD Holdings as their key investment, emphasizing its significant growth potential. They note that PDD Holdings has effectively leveraged its unique business model to capture a substantial share of the Chinese e-commerce market. GreenWood Investors are optimistic about PDD Holdings’ prospects, citing its innovative approach and strong market position as drivers for continued success. They mention:

“As PDD Holdings looks set to create a second Amazon with its international site Temu, we are highly attracted to the opportunity. Sales are growing 4x faster than Amazon’s, yet shares are priced at less than a quarter of the Amazon earnings multiple. PDD is a perfect example of why we want to look outside of the “Big Ten” companies that are nearly a third of global market indices.”

Tiger Global Management in its latest 13-F filings disclosed a new $254 million position in PDD Holdings (NASDAQ:PDD) as of December 31, 2024.

Despite growing competition, PDD Holdings (NASDAQ:PDD) reported impressive financial results for Q3 2024, with revenue surging 44% year-over-year to $14.2 billion. The company also demonstrated strong cost management, as its net profit margin expanded by 290 basis points to 27%. To drive long-term growth, PDD Holdings is ramping up investments in its platform and supply chain ecosystem. These strategic efforts aim to enhance its market position, lower transaction costs for merchants, and support various regions, ultimately contributing to sustained earnings growth.