PDD’s Q2 revenue reached 112.4 billion yuan, up only 8% year over year—falling short of market expectations, and net profit even dropped 12%. In the same week, after Amazon released its earnings report, its stock price jumped 15% in a single day, and AWS growth was 37%. Two e-commerce giants: one seems like it’s put into reverse, the other like it’s pressing the accelerator.
PDD’s problem is overseas. Chen Lei himself said Temu has been tangled up by regulators and compliance requirements across different countries. As globalization hits new challenges, the company has shifted its main focus back to domestic grocery shopping; this year, revenue is aiming for around 400 billion yuan. Amazon, on the other hand, has been gorging on AI infrastructure dividends. It raised its full-year capital expenditures to $220 billion. Even Echo smart speakers had their prices increased due to higher storage chip costs—yet cost pressure continues to pass through.
One company is feasting on AI dividends, while the other is ramming into a compliance wall and finding it painful. If PDD can’t get its growth back on track, the valuation logic the market uses will need to be replaced with a new set of explanations.
PDD’s problem is overseas. Chen Lei himself said Temu has been tangled up by regulators and compliance requirements across different countries. As globalization hits new challenges, the company has shifted its main focus back to domestic grocery shopping; this year, revenue is aiming for around 400 billion yuan. Amazon, on the other hand, has been gorging on AI infrastructure dividends. It raised its full-year capital expenditures to $220 billion. Even Echo smart speakers had their prices increased due to higher storage chip costs—yet cost pressure continues to pass through.
One company is feasting on AI dividends, while the other is ramming into a compliance wall and finding it painful. If PDD can’t get its growth back on track, the valuation logic the market uses will need to be replaced with a new set of explanations.