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.

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.