Nomura Upgrades PDD Holdings to Buy, Calls Stock Too Cheap to Ignore

Nomura has raised its rating on PDD Holdings (NASDAQ: PDD), the parent company of popular shopping platform Temu, from Neutral to Buy. The investment bank kept its price target steady at $136.00, which represents roughly 35% upside from PDD's recent closing price of $100.62.

The upgrade comes as Nomura analysts argue the stock has become significantly undervalued following a 20% decline over the past year, a stretch that also saw PDD underperform the HSI tech index. Trading at just 8.6 times its 2026 forward price-to-earnings ratio, Nomura believes the risk-reward profile has become too attractive to overlook.

A key factor behind the bullish shift is the resilience of PDD's international business. While its domestic Chinese e-commerce segment shows signs of slowing growth, Temu's overseas operations have demonstrated a steady recovery, with transaction service revenues gaining momentum. Nomura credited PDD's management team for navigating a difficult global environment marked by tariff increases and shifting import regulations across multiple markets throughout 2025.

Temu continued to draw strong consumer demand in the United States despite headwinds from elevated import tariffs. Adding to that momentum, a recent U.S. Supreme Court decision that overturned a significant portion of Washington's tariff measures is expected to further benefit the platform, which has built a large and loyal American customer base.

Nomura also expressed support for PDD and Temu's newly launched New Pin Mu initiative, viewing it as a strategic move to address growing regulatory scrutiny surrounding Chinese goods in Western markets.

With improving fundamentals abroad, a discounted valuation, and a proactive approach to compliance and regulation, Nomura sees PDD Holdings as a compelling opportunity for investors willing to look past near-term noise in the Chinese e-commerce sector.