PDD Holdings Inc, the parent company of Temu, surpassed Alibaba Group (NYSE:BABA) on Thursday as the most valuable Chinese e-commerce company by market capitalization.
PDD stock closed yesterday with a market cap of nearly $196 billion, surpassing Alibaba's market value of $190.45 billion.
NYSE-listed shares of Alibaba fell more than 3% in early Friday trading after Morgan Stanley (NYSE:MS) analysts downgraded the stock to 'Equal Weight' from 'Overweight', citing concerns over softness in its customer management revenue and cloud business due to a weak economic recovery in China, Reuters reported.
Meanwhile, Morgan Stanley (NYSE:MS) named PDD as its top pick in the sector, writing that the company is best positioned to navigate the current economic environment with its heavy discounting steps.
"We expect PDD to continue to gain share in the domestic market thanks to its favorable business model amid consumers' behavior shift," the analysts wrote.
Shares of Alibaba have fallen 21% year to date and have lost 14% since the company announced on November 16 that it had scrapped plans to spin off its cloud business.
PDD shares, meanwhile, have surged 71% since the beginning of 2023.
Contact Sean at sean@proactiveinvestors.com