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Luke Kawa8/25/25

Cost controls by Temu parent PDD Holdings fuel big Q2 profit beat

PDD Holdings, parent company of Temu, is known for offering low-cost consumer goods.

And its financial success in the second quarter came from applying that low-cost philosophy within the company.

While revenues of nearly 104 billion yuan ($14.5 billion) modestly exceeded expectations, adjusted diluted earnings per share of 22.07 yuan ($3.08) crushed estimates for 15.50 yuan. ADRs for the e-commerce company shot up as much as 11.6% in premarket trading but have given up all those gains to be down 2% as of 8:55 a.m. ET.

During the conference call, co-CEO Jiazhen Zhao warned that this was more of a bumper quarter for the bottom line.

“We do not believe this quarter’s profit levels are sustainable,” he warned, with other executives citing positive e-commerce seasonality as also juicing these results.

Over the course of the quarter, PDD Holdings had to grapple with the end of the “de minimis” exemption that allowed inexpensive shipments to come into the US duty-free.

“PDD’s 2Q non-GAAP operating profit beat expectations for the first time in four quarters, aided by lower-than-expected marketing expenses,” Bloomberg Intelligence senior industry analyst Catherine Lim wrote. “While margins are unlikely to return to prior highs, early signs suggest profitability may prove more resilient even as the company sustains investment and prioritizes long-term growth over short-term gains.”

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Tasha Matsumoto

Stocks rebound as tariff fears ease

Stocks clawed back some, but not all, of Friday’s losses after Trump signaled softening in his China stance.

Chicago Bulls Dennis Rodman (91) and Michael Jordan (23) in action, rebounding vs Charlotte Hornets

Tiny Scientists in Lab

String of acquisitions fuels biotech optimism

In the past month, the S&P Biotech ETF surpassed March 2020 levels.

J. Edward Moreno14h

markets

Micron jumps after rare double upgrade by BNP Paribas Exane, which lifts price target to Street high of $270

Micron, the best-performing member of the VanEck Semiconductor ETF this year, is jumping on Monday thanks to converting its biggest doubter on Wall Street into its biggest fan.

BNP Paribas Exane analyst Karl Ackerman went through with a rare double upgrade of the memory chip specialist to “outperform” from “underperform.” In the process, he more than doubled his price target on the stock to $270 — the highest among analysts surveyed by Bloomberg — from $100, which had previously been the lowest price target on the Street.

“We now fully embrace high-bandwidth memory (HBM) as a sustainable, separate growth vector, and we beleive we are in the early innings of a memory supercycle,” he wrote.

Separately, analysts at Evercore ISI also boosted their price target on Micron to $137 from $100.

markets

IonQ soars after announcing “significant advancement in quantum chemistry simulations”

IonQ is ripping higher in early trading after the quantum computing company announced “a significant advancement in quantum chemistry simulations.”

In particular, this demonstration, performed in collaboration with a major automotive manufacturer, was more accurate than classical computing in calculating “nuclear forces at critical points where big changes occur.”

Knowing how different compounds behave and respond to force has potentially very useful commercial applications because it helps us discern how those materials can best be designed and utilized for different purposes.

“This research demonstrates a clear path for quantum computing to enhance chemical simulations that are foundational to decarbonization technologies,” said Niccolo de Masi, chairman and CEO. “Our work goes beyond academic benchmarks. It demonstrates a practical capability that can be integrated into molecular dynamics workflows used across pharmaceuticals, battery, and chemical industries.”

IonQ is the most commercially advanced pure-play quantum computing company, generating over $52 million in revenues over the past 12 months, well more than D-Wave Quantum, Rigetti Computing, and Quantum Computing combined.

Now, is this the reason why IonQ (and its peers) are on a tear today? Maybe. There’s a big rebound in most speculative pockets of the market after Friday’s tariff threat induced a tumble.

At the very least, this is a useful excuse. Traders have been exceedingly happy to bid up shares of quantum computing companies on their long-term potential, often (ironically) through short-term call options.

markets

Matt Phillips18h

Rocket Lab may be “alternative to SpaceX in the making,” says Morgan Stanley

Rocket Lab surged early Monday after Morgan Stanley analysts lifted their price target on the stock to $68 from $20, making them the high bidder among analysts covering the popular, but still money-losing, commercial space launch company.

The $68 target — right around where the shares are currently trading — is the highest among the 17 analysts tracked by FactSet.

And while Morgan Stanley analysts couldn’t bring themselves to upgrade the stock to a “buy,” leaving their rating at “equal weight,” they gave the stock a pretty bullish review, writing:

“We see a potential alternative to SpaceX in the making. The company is mirroring SpaceX’s footsteps in a number of respects, including scaling up rocket lift capacity, embracing booster reusability, and ultimately moving out on a constellation of its own (ala Starlink). Meanwhile, successive Electron launches and a growing manifest reinforce the company’s already-impressive track record. The market, in our view, is now taking valuation cues for RKLB from SpaceX’s implied valuation, which has grown from a reported ~$100bn at the end of 2021 to ~$400bn today.”

Rocket Lab shares have emerged as a favorite of retail traders this year, thanks to their gain of more than 150%. The stock is up roughly 600% over the last 12 months.

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