Why Michael Burry Is Doubling Down on JD.com Stock

“Big Short” famed investor Michael Burry has moved his investment from Chinese e-commerce giant Alibaba Group Holding (BABA) to its prime rival JD.com (JD). However, rather than buying JD.com on a trigger, Burry did so mostly because Alibaba has become too expensive. He argued that Alibaba would need to “fall by half” for him to be interested again. Moreover, the famous investor disliked Alibaba’s capital raise for AI capabilities and infrastructure investment. 

On the other hand, JD.com has emerged as his preference in this paradigm. The company is showing signs of improvement, especially in its bottom line. Moreover, it is trying to expand its operations. For instance, it recently won a newly awarded pilot development area in Hong Kong's ​Northern Metropolis (a mega-project bordering Mainland China), in a JV with six companies. JD.com also plans to invest RMB 10 billion in resources to the robotics sector by 2028. 

So, rather than just a replacement, JD.com may have the substance to be a stock worth watching. 

About JD.com Stock

JD.com is a major Chinese e-commerce and technology company headquartered in Beijing. It operates mainly through JD Retail, JD Logistics, and other new businesses. JD Retail sells products directly to customers and also hosts third-party sellers on its online marketplace. 

JD Logistics runs one of China’s largest delivery networks, with thousands of warehouses and a large workforce that ensures fast shipping. Beyond shopping and delivery, JD offers healthcare, financial services, and AI-driven supply chain tools. The company is listed in New York and Hong Kong and has expanded overseas, with its headquarters in Beijing, China. JD.com has a market capitalization of $39.44 billion. 

The company’s stock has been under pressure over the past year mainly because revenue growth has been impacted while competition and macro headwinds in China have intensified. Over the past 52 weeks, the stock has dropped 9.4%. It reached a 52-week low of $24.51 on March 5, but is up 17.6% from that level. This year, the stock is up marginally 0.42%.

On a forward-adjusted basis, JD.com is trading at a price-to-earnings (non-GAAP) ratio of 8.67 times, below the industry average of 16.12 times. 

JD.com Q2 Profit Jumped Even Though Revenue Dipped

For the second quarter, JD.com’s revenue dropped by 2.9% year-over-year (YOY) to RMB 346.40 billion ($51.53 billion at current exchange rates). The company pointed to tougher comps for this drop. The top-line decline was largely driven by an 11.8% YOY decrease in electronics and home appliances revenue to RMB 157.89 billion ($23.49 billion). 

Despite the wobbly top-line performance, the bottom line surged, driven by solid profitability in its core JD Retail business and continued narrowing of losses at JD Food Delivery. Net income per ADS rose 20.7% YOY to RMB 5.01. Moreover, JD Retail’s operating margin reached a record high during peak promotional periods, boosted by better margins in key categories and a shift toward higher-margin marketplace and marketing revenues.

Wall Street analysts are robustly optimistic about JD.com’s future earnings. For fiscal 2026, EPS is projected to surge 32.9% annually to $2.83, followed by a 19.1% growth to $3.37 in fiscal 2027. For the third quarter of fiscal 2026, the company’s EPS is projected to climb 100% YOY to $0.88. 

What Analysts Say About JD.com’s Stock

This month, Bernstein SocGen Group reiterated an “Outperform” rating on JD.com and a $40 price target. The firm noted that the decline in JD.com shares following the company’s quarterly results was unsurprising after a recent rally. The analyst also identified a more gradual path to reducing food delivery losses as a negative datapoint from the earnings call. 

Benchmark analysts reiterated a “Buy” rating and a $42 price target. Despite top-line uncertainty amid macroeconomic softness, the firm sees signs that JD.com’s recovery is on track. Benchmark expects revenue growth to pick up as year-ago comparisons ease. It also sees upside from JD’s investments in AI, robotics, and logistics automation.

Last month, Barclays analysts lowered the price target from $43 to $41 and kept the “Overweight” rating on the stock. The analyst noted weakening macro consumption. The firm also says that potential growth deceleration in the general merchandise and marketplace segments puts the focus back on its core electronics and appliances segment. 

Wall Street analysts are strongly bullish on JD.com’s stock, with a consensus “Strong Buy” rating. Of the 23 analysts rating the stock, a majority of 18 have given it a “Strong Buy,” two suggest a “Moderate Buy,” while two are playing it safe with a “Hold,” and one suggested a “Moderate Sell.” The consensus price target of $40.30 represents a 40% upside from current levels. Moreover, the Street-high price target of $50 implies a 73.6% upside.