Why PDD Holdings Inc. (PDD) Crashed on Monday

We recently compiled a list of the The 10 Worst-Performing Stocks on Monday. In this article, we are going to take a look at where PDD Holdings Inc. (NASDAQ:PDD) stands against the other stocks.

Ten companies kicked off this week’s trading with significant losses, mirroring a wider market pessimism over growing trade tensions.

The declines came following the US imposition of additional tariffs on goods from Canada, Mexico, and China, and signals of potential retaliation of taxes on US goods.

On Monday, the Dow Jones lost another 0.28 percent, while the S&P 500 and the Nasdaq Composite both registered steep declines of 0.76 percent and 1.20 percent, respectively. The slump came following President Donald Trump’s announcements that he would slap a 25-percent tariff on Canadian and Mexican goods, while a special 60-percent rate would be taxed on Chinese products.

Our list of Monday’s top losers only considered the companies with at least $2 billion in market capitalization and $5 million in daily trading volume.

A close-up of a customer using the company’s e-commerce platform whilst shopping online.

PDD Holdings Inc. (NASDAQ:PDD)

Shares of Temu parent PDD Holdings Inc. (NASDAQ:PDD) extended a losing streak for the second day on Monday, losing 5.96 percent to close at $105.24 apiece as investor sentiment was dampened by the US imposition of a hefty tariff rate on Chinese goods.

On Saturday, President Donald Trump officially signed the imposition of an additional 10 percent tariffs on Chinese goods, as well as 25 percent on imports from neighboring countries Canada and Mexico.

The development closes a loophole that Chinese online retailers such as Temu and Shein have been using to avoid US taxes. Called the “de minimis” exemption, or a Latin term that means “too small to matter,” the loopholes let packages worth less than $800 be brought to the US without any customs fees.

It has become a big advantage for companies like Temu and Shein, as it helped them sell products like clothes, furniture, electronics, and home decor at very low prices as they try to expand in the US.

Overall PDD ranks 9th on our list list of the worst performing stocks on Monday. 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 timeframe. 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.