Jim Cramer Wants You to Watch Out For These 10 Stocks

4. JD.com Inc. (NASDAQ:JD)

Number of Hedge Fund Investors: 59

Jim Cramer noted that Walmart Inc. (NYSE:WMT) recently sold off its $3.7 billion investment in JD.com Inc. (NASDAQ:JD). Despite this significant divestment, Walmart Inc. (NYSE:WMT) plans to maintain its partnership with JD.com Inc. (NASDAQ:JD). Interestingly, this move caused JD.com Inc. (NASDAQ:JD)’s stock to drop by 8%. Cramer speculated that this decline might suggest an overinflated market in China.

“Walmart blew out of its stake in Chinese online retailer JD.com. However, the American retail giant will continue the partnership. Strangest thing: The move knocked JD.com stock down 8%. It’s making me think that perhaps the whole market in China is wildly inflated.”

JD.com Inc. (NASDAQ:JD) is a top player in China’s e-commerce sector, with a major market share that puts it in strong competition with Alibaba Group Holding Limited (NYSE:BABA). JD.com Inc. (NASDAQ:JD)’s extensive product selection and efficient delivery system enhance its market position.JD.com Inc. (NASDAQ:JD)’s recent financial results are strong, showing a 12% increase in revenue compared to last year, thanks to higher customer engagement and a broader market presence.

JD.com Inc. (NASDAQ:JD)’s substantial investments in technology, such as AI and automation, are improving efficiency and cutting costs. With the e-commerce market in China expanding due to more internet use and consumer spending, JD.com Inc. (NASDAQ:JD) is well-placed to grow its market share. Additionally, its expansion into Southeast Asia and partnerships with global brands add to its growth potential.

Ariel Global Fund stated the following regarding JD.com, Inc. (NASDAQ:JD) in its first quarter 2024 investor letter:

“We initiated a position in China-based technology-driven E-commerce company, JD.com, Inc. (NASDAQ:JD). The brand has long been known across the region as a superior online shopping channel due to its unique first-party model and unparalleled fulfillment service underpinned by JD Logistics. Yet, a challenging macro environment drove shares lower as shoppers began seeking bargains. In response, the company made significant investments in elevating its third-party merchant platform to enhance its variety of product offerings and price competitiveness for consumers. We believe these actions will yield an improved product mix, stronger top-line growth and margin expansion on a go-forward basis.”