Michael Burry’s Top Holdings Were Gaining While NVDA Was Crashing

6. PDD Holdings Inc.

Portion of portfolio: 9.39%

Value of holdings: $7,274,250

PDD Holdings Inc. (NASDAQ: PDD), formerly known as Pinduoduo Inc., is a multinational e-commerce group that owns and operates a range of businesses such as Pinduoduo, a popular Chinese online store with a focus on farming products and the online marketplace Temu.

Burry took an initial stake in PDD in the fourth quarter, a rival of Alibaba in China’s e-commerce sector, by acquiring 75,000 of its shares.

China’s second-largest e-commerce player has a market capitalization of $163.8 billion with a potential to reach a market cap of $248 billion by 2029. PDD captures over 20% of the market share with its Consumer-to-Manufacturer (C2M) model and has virtually no debt and a strong return on invested capital (ROIC), according to a bullish thesis on Substack by Favona Hathaway.

Additionally, the company has been reporting strong financial results, achieving compound annual growth rates (CAGR) of 53% in total revenue, 50% in gross profit, 140% in operating income and 133% in net income since 2021. Third quarter 2024 revenue increased 44% year-over-year to $14.2 billion. Net income grew 60.8% over the same period.

An offshoot of Pinduoduo, Temu, founded in 2022 has rapidly grown over the years to become a major player in global e-commerce, operating in more than 50 countries worldwide. PDD Holdings stock has gained over 30% in its value year-to-date and is on an upward trajectory following U.S. President Donald Trump’s decision to reverse his decision to eliminate the de minimis loophole under which packages from China with a value at under $800 to be processed without customs duties or tariffs. In the meantime, the European Commission has suggested tougher customs inspections and the introduction of a new handling fee to control the influx of low-cost Chinese parcels into Europe.

Here’s what GreenWood Investors said about PDD Holdings, a newcomer to the list of Michael Burry’s top portfolio holdings, as their key investment in their Q4 2024 investor letter:

“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.”

Year-to-date the company’s stock gained 24.99% in its value, closing at $117.98 per share on March 11.