Bernstein's Outlook on China's Internet Stocks in 2025

Investing.com — Bernstein noted a mixed macroeconomic outlook for China in 2025 while expressing optimism about specific internet stocks that benefit from “idiosyncratic growth drivers” and shareholder-friendly policies.

JD.com Upgrade

The firm upgraded JD.com (NASDAQ:JD) to "outperform," driven by its focus on profitability amid government support for durable goods consumption. Bernstein stated JD’s valuation is under 8 times 2025 estimated earnings, which presents an asymmetric opportunity despite macroeconomic uncertainty.

Downgrade on Boss Zhipin

While the brokerage downgraded Boss Zhipin, an online recruitment platform, to "market perform," noting challenges in offsetting macro headwinds with paying user and average revenue per user (ARPU) growth.

Top Picks

Among its top picks, Bernstein highlighted Tencent, Meituan, NetEase (NASDAQ:NTES), and PDD Holdings, pointing to attractive valuations and growth opportunities.
– Tencent, trading at 12 times 2026 estimated earnings, and Meituan, at 13-14 times, offer entry points despite recent pressures from gaming comparisons and international spending.
– PDD's valuation at 9 times 2025 earnings reflects reduced investor expectations, while NetEase has momentum following positive Q3 earnings and promising gaming announcements.

Market Sentiment

Bernstein noted that modest valuation multiples across the sector have attracted contrarian investors, even as market sentiment continues to swing on China’s macroeconomic outlook.

Shares of key Chinese internet firms have experienced heightened volatility, influenced by tactical trading and mean reversion affecting large stock moves.