PDD Holdings' Stock Slides to 100th in U.S. Trading Volume Amid Divergent Institutional Bets and Analyst Disarray Over Valuation Potential

Market Snapshot

PDD Holdings Inc. (NASDAQ: PDD) closed on December 23, 2025, with a marginal 0.13% gain, trading at $109.51 per share. Despite the slight price increase, the stock’s trading volume dropped sharply by 33.11% to $0.66 billion, ranking it 100th in volume among U.S. equities. The stock’s market capitalization stands at $152.45 billion, with a price-to-earnings (P/E) ratio of 11.43. The 50-day and 200-day moving averages are $124.14 and $119.16, respectively, indicating the stock is currently trading below its 50-day average but above its 200-day average. PDD’s price range for the past 12 months is $87.11 to $139.41, suggesting a potential undervaluation relative to its historical high.

Key Drivers

The stock’s muted performance was influenced by divergent institutional investor activity and mixed analyst sentiment. Most notably, Voya Investment Management LLC drastically reduced its stake in PDD during Q3 2025, selling 45,206,426 shares—99.6% of its previous holdings—to retain just 183,214 shares valued at $24.215 million. This significant reduction signaled a lack of confidence in the stock’s near-term prospects and contributed to the decline in trading volume. However, other institutional investors showed increased interest in Q2 and Q3, including Westside Investment Management Inc., which boosted its stake by 398%, and ABS Direct Equity Fund LLC, which raised its position by 78.6% to become PDD’s second-largest holding at 8.1% of its portfolio. These contrasting moves highlight a split in institutional sentiment, with some investors viewing PDD as a high-conviction opportunity amid its e-commerce growth in China.

Analyst ratings further complicated the narrative. While Wall Street Zen upgraded PDD to “buy” in late November and Sanford C. Bernstein set a $135.00 price target, Arete Research and Zacks Research downgraded the stock to “neutral” and “hold,” respectively. The average analyst rating remains “Hold,” with a mean price target of $136.43, implying a potential 24.6% upside from its current price. Despite the elevated price targets, the lack of consensus reflects uncertainty about PDD’s ability to sustain growth amid macroeconomic headwinds in China and regulatory risks.

The company’s business fundamentals also played a role. PDD, the parent company of Pinduoduo, operates a social-commerce platform that emphasizes group buying and interactive shopping. Its model has historically driven user engagement and low prices, but recent quarters have seen slower user growth and margin pressures. Institutional ownership at 39.83% underscores the stock’s appeal to long-term investors, yet the recent outflows from major funds like Voya suggest short-term volatility.

Finally, technical indicators pointed to a potential rebound. PDD’s current price of $109.51 is closer to its 200-day moving average than its 50-day average, suggesting a possible correction after a period of underperformance. However, the stock’s beta of 0.07 indicates low sensitivity to market movements, which may limit its upside in a rising market or downside in a downturn. Analysts’ focus on the $130–$135 price range as a target suggests that PDD’s next major move will depend on its ability to execute on growth strategies, particularly in expanding its fresh agricultural produce offerings and enhancing user retention in China’s competitive e-commerce landscape.

Institutional and Analyst Sentiment

The mixed institutional activity and analyst ratings underscore a broader debate about PDD’s valuation. While large-scale sellers like Voya signaled caution, smaller firms such as Valeo Financial Advisors LLC and National Bank of Canada FI added substantial positions in Q2 and Q3, with the latter increasing its stake by 536.7%. These contrasting actions reflect divergent views on PDD’s growth trajectory and its ability to navigate challenges in China’s evolving consumer market.

Analysts also highlighted the stock’s low P/E ratio of 11.43, which is significantly below the S&P 500 average, as a potential undervaluation. However, the company’s P/E-to-growth (PEG) ratio of 1.23 suggests that its earnings growth may not justify the current valuation. This discrepancy between fundamental metrics and market expectations further complicates investment decisions, particularly for risk-averse investors.

In summary, PDD’s recent performance was shaped by a combination of institutional outflows, selective inflows, and mixed analyst guidance. While the stock’s technical indicators and business model offer a foundation for long-term growth, near-term volatility is likely to persist as investors weigh the risks and rewards of its e-commerce strategy in China.