We recently published a list of Michael Burry’s Top Holdings Were Gaining While NVDA Was Crashing. In this article, we are going to take a look at where PDD Holdings Inc. (NASDAQ:PDD) stands against other Michael Burry’s top Holdings that were gaining while NVDA was crashing.

Michael Burry’s name is synonymous with contrarian investing strategies, being one of the few investors who bet against the housing market and profiting from the subprime mortgage crisis between 2007 and 2010. His stance on the real estate market in 2008 made the American investor and hedge fund manager famous enough to make it in the 2015 film “The Big Short,” where he was portrayed by Christian Bale.

Over the years, Burry, who established a renowned and well-regarded California-based hedge fund Scion Asset Management, LLC in 2013, often made headlines for his recession warnings and market crash “predictions”. However, with warnings about economic downturns fizzling out, Burry’s reputation as both an expert and hedge fund manager was often at stake.

But even though some of his recession warnings have not played out as predicted, Burry remains one of the market geniuses whose moves investors value and follow as explained in our recent survey of Michael Burry’s portfolio in 2024.

His firm has achieved a return of over 160% over the past decade, outperforming the S&P 500 during that time, according to Ticker Nerd.

READ ALSO: Michael Burry Stock Portfolio: Top 8 Stock Picks and 10 Cheapest Stocks Insiders Are Buying Recently

Scion Asset Management manages hedge funds with discretionary assets under management of $196,206,549 (as of March 2024). In its fourth quarter SEC 13F filing on February 14, Burry’s firm disclosed a total of 13 security holdings with a portfolio value of $77,435,131 and a top 10 holdings concentration of 93.62%.

Burry wrapped up 2024 being cautiously optimistic regarding long-term prospects in terms of China’s online retail market, given ongoing regulatory and macroeconomic uncertainties in the Asian country. In the quarter ending December 31, he cut the stake in two of his top three investments in Chinese technology before the January release of DeepSeek’s latest AI models which turned tech space on its head starting a massive rally in the country’s stock market. Apart from that, it appears Burry is looking to capitalize on the growing demand for healthcare services and advanced analytical technologies, while also focusing on consumer discretionary taking positions in apparel, cosmetics, and luxury goods industries.

Our Methodology

To make the list of Michael Burry’s top portfolio holdings we reviewed Scion Asset Management’s fourth-quarter 2024 portfolio and ranked the list according to the hedge fund’s stake value in each firm. If there was an overlap, we prioritized the holding that was worth more money. We have also assessed the number of shares acquired by Scion Asset and hedge fund sentiment toward each stock from Insider Monkey’s database of hedge investor letters.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373% since May 2014, beating its benchmark by 218 percentage points (see more details here).

That said, please see if there are overlaps between our compilation of famous investor’s top 10 stock picks heading into 2025 wrapped up in October and a new list of Michael Burry’s top 10 portfolio holdings.

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

PDD Holdings Inc. (NASDAQ: PDD)

Portion of portfolio: 9.39%

Value of holdings: $7,274,250

PDD Holdings Inc. (NASDAQ: PDD), formerly known as Pinduoduo Inc., is a multinational e-commerce group that owns and operates a range of businesses such as Pinduoduo, a popular Chinese online store with a focus on farming products and the online marketplace Temu.

Burry took an initial stake in PDD in the fourth quarter, a rival of Alibaba in China’s e-commerce sector, by acquiring 75,000 of its shares.

China’s second-largest e-commerce player has a market capitalization of $163.8 billion with a potential to reach a market cap of $248 billion by 2029. PDD Holdings (NASDAQ: PDD) captures over 20% of the market share with its Consumer-to-Manufacturer (C2M) model and has virtually no debt and a strong return on invested capital (ROIC), according to a bullish thesis on Substack by Favona Hathaway.

Additionally, the company has been reporting strong financial results, achieving compound annual growth rates (CAGR) of 53% in total revenue, 50% in gross profit, 140% in operating income and 133% in net income since 2021. Third quarter 2024 revenue increased 44% year-over-year to $14.2 billion. Net income grew 60.8% over the same period.

An offshoot of Pinduoduo, Temu, founded in 2022 has rapidly grown over the years to become a major player in global e-commerce, operating in more than 50 countries worldwide. PDD Holdings stock has gained over 30% in its value year-to-date and is on an upward trajectory following U.S. President Donald Trump’s decision to reverse his decision to eliminate the de minimis loophole under which packages from China with a value at under $800 to be processed without customs duties or tariffs. In the meantime, the European Commission has suggested tougher customs inspections and the introduction of a new handling fee to control the influx of low-cost Chinese parcels into Europe.

Here’s what GreenWood Investors said about PDD Holdings (NASDAQ: PDD), a newcomer to the list of Michael Burry’s top portfolio holdings, as their key investment in their Q4 2024 investor letter:

“As PDD Holdings looks set to create a second Amazon with its international site Temu, we are highly attracted to the opportunity. Sales are growing 4x faster than Amazon’s, yet shares are priced at less than a quarter of the Amazon earnings multiple. PDD is a perfect example of why we want to look outside of the “Big Ten” companies that are nearly a third of global market indices.”

Year-to-date the company’s stock gained 24.99% in its value, closing at $117.98 per share on March 11.

Overall, PDD ranks 6th on our list of Michael Burry’s top Holdings that were gaining while NVDA was crashing. While we acknowledge the potential of PDD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. 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 30 Best Stocks to Buy Now According to Billionaires

Disclosure: None. This article is originally published at Insider Monkey.