Shares of PDD Holdings (PDD, Financial) fell about 4% to $99.3 after JPMorgan cut its rating from "overweight" to "neutral" due to low short-term visibility and macro headwinds.

JPMorgan's Andre Chang downgraded the price target from $170 to $105, implying a bearish view as it is more weighted on investments and less clear on financials for the next six months. However, Chang discussed the long-run continual growth potential for Chinese exports to the US, pointing out some risks that could arise, such as a change in the US tariffs under Trump's administration on Chinese imports.

This Chinese e-commerce giant saw its profit drop in the third quarter as PDD began investing more to defend its place in the fiercely competitive discount e-commerce sector. Revenue for the quarter ended at 99.35 billion yuan, yet problems still need to be solved due to decreased customer willingness to purchase goods as the Chinese property market crashes and record youth unemployment.

Amid these challenges, JPMorgan recommended that investors explore alternatives such as JD.com (JD, Financial) and Alibaba (BABA, Financial), which are similar in price but expected to provide higher returns in the middle of the timeline.

This further soured PDD's fortunes over the past few days. Its ADR shares were down Thursday as the selloff intensified for Chinese e-commerce names. With geopolitical and domestic economic challenges, PDD's near- to medium-term future remains grim.