We recently compiled a list of the 30 Best Stocks To Invest In According to Billionaires. In this article, we are going to take a look at where PDD Holdings Inc. (NASDAQ:PDD) stands against the other stocks.
Billionaires and top hedge fund managers dominate the market with large investments in leading companies with strong track records and exceptional performance. These investors have large capital and they like to invest in established companies rather than betting on underperformers.
How’s the Stock Market Performing in 2025 So Far?
The S&P 500 index has reached its all-time highs, achieving returns of over 20% for the second consecutive year post-COVID. Billionaire investor and CEO of Berkshire Hathaway Warren Buffett made a bold move in 2024, selling a record $134 billion of net stock. Buffett’s move has raised concerns for investors and analysts. Historically, when Buffett’s firm becomes a net seller, it’s often followed by below-average market performance. Many believe that this could be a signal of stock market underperformance in 2025.
The stock market has already taken a hit in 2025 following the release of Chinese AI model DeepSeek. Almost $1 trillion was wiped away from the U.S. stock market in January 2025. Now, the market is reacting to President Donald Trump’s tariff policy, as the U.S. initiates 25% tariffs on Canada and Mexico.
“Tariffs increase the odds of a negative feedback loop in the economy. Nobody believed they would be implemented,” said Dennis Debusschere, founder of 22V Research.
The S&P 500 has been underperforming its global peers in 2025 so far, with equity indexes in China, Europe, Canada, and Mexico all racing ahead. S&P 500 has slid nearly 1.90% year-to-date, as of March 4. Whereas, the tech-heavy NASDAQ 100 index has dropped over 4% so far this year.
According to Deutsche Bank strategist Parag Thatte, equity positioning dropped significantly in the week ended February 28, plunging back down to near neutral and wiping out the post-election bump.
Billionaire investor Leon Cooperman in an interview during the Squawk Box show on CNBC recently said that the president is on the right track, but he is doing things in a very destabilizing manner. The president is focusing on reducing the deficit, which is the right thing to do, Cooperman added.
The transition phase seems to have a much bigger impact on the broader market, coupled with the tariff policy. Ironsides Macroeconomics’ Barry Knapp expects the Fed to cut a full percent this year, with the first cut projected in May. Knapp added that the economy needs to shift from government spending to capital spending for a better environment for business.
Our Methodology
For the best stocks to invest in according to billionaires, we analyzed Insider Monkey’s exclusive database of billionaire stock holdings. We selected the 30 best stocks to invest in based on the highest number of billionaire investors, updated as of Q4 2024. For the stocks with the same number of billionaire holdings, we have used the total value of billionaire holdings as a secondary metric to rank the stocks. These billionaires are founders or managers of some of the world’s leading hedge funds and companies. The stocks are ranked in ascending order of the aforementioned metrics.
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 (see more details here).
A close-up of a customer using the company’s e-commerce platform whilst shopping online.
PDD Holdings Inc. (NASDAQ:PDD)
No. of Billionaire Investors: 21
Total Value of Billionaire Holdings: $2.15 Billion
PDD Holdings Inc. (NASDAQ:PDD) is a Chinese multinational online commerce group and retailer that owns and operates a range of diverse businesses. The company operates famous e-commerce platforms including Pinduoduo and its fast-growing online marketplace Temu. The company’s strategic decision to expand Temu across global markets seems to be a great move. Temu has expanded its operations in more than 50 countries worldwide and is expected to be a key driver for the company’s growth moving forward.
PDD Holdings Inc. (NASDAQ:PDD) continues to build the user base, gain more sellers, and improve user engagement. This strategy creates a network effect that is expected to drive a growth cycle and value creation. In addition to that, PDD posted a 44% year-over-year revenue growth in Q4 2024, with revenue reaching RMB 99.4 billion. The good news for the company is that the U.S. President has reinstated De Minimis exemptions, which means smaller Temu orders remain outside the scope of tariffs.
Baron Funds, an investment management firm, released its Q3 2024 investor letter. Here is what the fund said:
“During the third quarter, we re-initiated a small investment in PDD Holdings Inc. (NASDAQ:PDD). We believe the company is truly unique in the global e-commerce landscape, with an innovative business model, and very strong growth prospects. Founded in 2015 as Pinduoduo, the company has grown into China’s second-largest e-commerce player, capturing over 20% market share. PDD’s Consumer-to-Manufacturer (C2M) model, which connects manufacturers directly to consumers, eliminated intermediaries, allowing for ultra-low prices that attract price-sensitive consumers and small merchants. Its discovery-based, algorithm-driven shopping experience has created a highly engaging platform, driving user and merchant growth in a virtuous cycle. We expect PDD to continue gaining share in China given its dominance in the value-for-money segment, growing branded product offerings at affordable prices, and high operational efficiency. PDD’s network effects and cost advantage, supported by its lean structure and efficient C2M model, are set to grow as it scales, both domestically and internationally. Its cross-border e-commerce platform, Temu, launched in September 2022, has rapidly become one of the world’s fastest-growing apps. Leveraging China’s excess capacity and PDD’s supply-chain efficiency, Temu wields strong pricing power over Chinese suppliers and attracts overseas consumers with competitively priced products. While still in the early stage, Temu has achieved 2% of the global ex-China e-commerce market and a variable break even in the U.S. market, underscoring PDD’s focus on sustainable growth. Despite its rapid growth and profitability, PDD trades at a double-digit free cash flow yield (despite losses from the early-stage international expansion through Temu), significantly below sector peers. While concerns over geopolitical tensions exist, we believe PDD’s growing competitive edge, strong cash flow, and disciplined management position it to create substantial long-term value for shareholders.”
Overall PDD ranks 20th on our list of the best stocks to invest in according to billionaires. While we acknowledge the potential of PDD as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PDD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
