PDD Holdings (PDD) is rising as investors react to an analyst upgrade that argued the stock’s valuation has become overly pessimistic and that Temu remains a key growth driver. Nomura upgraded PDD to Buy from Neutral and kept a $136 target, framing the shares as “too cheap” at a single-digit 2026 forward P/E multiple.

The upgrade lands shortly after PDD reported Q4 and full-year 2025 results (released March 25, 2026), when the company emphasized continued spending to strengthen its ecosystem and supply chain. With the earnings event freshly digested, the market is now weighing whether near-term margin pressure from investment can give way to steadier profitability while revenue growth continues.

PDD’s global expansion via Temu remains exposed to shifting trade and compliance regimes, which can influence fulfillment costs, pricing, and customer acquisition efficiency. In Europe, Temu has faced ongoing scrutiny under the Digital Services Act framework, keeping regulatory headlines in focus even as the stock rebounds on valuation-driven buying.