JD.com Surges 22% YoY, Sets Record Valuation Amid Strong Fundamentals and Growing Momentum

JD.com's Q2 results show revenue growth accelerating to 22% YoY, the fastest pace in years. The core retail business led the charge, with electronics and home appliances jumping 23%. User engagement also soared, with quarterly active customers increasing by over 40%. JD holds over $24 billion in net cash, more than half of its ~$45 billion market cap. Despite a dip in profitability and EPS, the company's strong fundamentals and AI-driven supply chain automation make a bullish stance warranted.

JD.com reported a significant 22% year-over-year (YoY) revenue growth in the second quarter of 2025, reaching RMB 357 billion, which exceeded market expectations [1]. The e-commerce giant's performance was driven by strong demand for electronics and government subsidies, as well as the expansion of its food delivery business, JD Takeaway. However, the company's non-GAAP operating profit dropped by 92% to RMB 896 million, primarily due to substantial investments in JD Takeaway, which incurred a RMB 12 billion loss [2].

The revenue growth was bolstered by a 23% increase in electronics and home appliance sales, attributed to enhanced supply chain capabilities and competitive pricing [3]. The company also saw a 40% increase in its quarterly active customer base, indicating strong user engagement [4]. Despite these positive signs, the operating margin shrank to 0.3% in the June quarter from 4% a year ago, highlighting the challenges posed by the food delivery business [2].

JD.com holds over $24 billion in net cash, more than half of its ~$45 billion market cap, which provides a strong financial cushion for future growth and strategic investments [3]. The company's core retail operating profit jumped by 38% YoY, reflecting operational efficiency gains and cost reductions [4].

Nomura, a leading financial services firm, maintains a "buy" rating on JD.com, adjusting its price target from $45 to $43. The firm cited strong momentum in JD's retail performance and the company's strategic initiatives as reasons for the positive outlook [1]. However, the company faces fierce competition in the instant delivery market, with long-established players like Meituan and Alibaba's Ele.me holding significant market shares [3].

In conclusion, while JD.com's revenue growth is impressive, the company's profitability has been significantly impacted by its expansion into the food delivery market. The company's strategic initiatives and strong market position remain robust, but the intense competition in the instant delivery sector poses a significant challenge. Investors should closely monitor the company's ability to balance growth and profitability in the coming quarters.

References:
[1] https://technode.com/2025/08/19/jd-com-revenue-growth-accelerates-but-profits-hit-by-new-business-expansion/
[2] https://www.ainvest.com/news/jd-buy-rating-revenue-growth-strategic-reinvestment-2508/
[3] https://www.tipranks.com/news/wall-street-zeroes-in-on-record-jd-com-stock-jd-valuation
[4] https://www.ainvest.com/news/jd-q2-2025-earnings-key-contradictions-food-delivery-strategy-ai-investment-user-growth-2508/