To The Moon

🔥 Alibaba, PDD, Tencent, JD.com & Sea/Shopee — which one is best positioned for the next AI + e-commerce cycle?

I’ve been thinking about the recent debate around Alibaba and Michael Burry’s bearish view.

Alibaba is down about 0.7% in the U.S. session in the screenshot, while its Hong Kong shares were slightly higher. But personally, I think focusing only on “Is Alibaba a buy or sell?” misses the bigger picture.

👉 The more interesting question is:

What happens to the entire Asian internet sector as companies spend aggressively on AI, compete for online consumers, and try to turn that investment into higher future revenue?

Instead of looking at one stock at a time, I want to compare several companies that are exposed to this broader trend:

🇨🇳 Alibaba — AI + Cloud + E-commerce

🇨🇳 PDD Holdings — Pinduoduo + Temu + Value E-commerce

🇨🇳 Tencent — WeChat + Gaming + Advertising + AI

🇨🇳 JD.com — E-commerce + Logistics

🇸🇬 Sea Limited — Shopee + Monee + Gaming

This becomes a much more interesting investment discussion.

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🟦 1. Alibaba — Is AI spending a problem or the next growth engine?

🤖 Alibaba is currently the biggest example of the AI investment debate.

The company’s latest quarter showed revenue growing around 9% year over year to approximately RMB269 billion, while AI Cloud and Compute Services revenue increased 45% to RMB48.4 billion.

The problem?

💰 Capital expenditure increased about 75% to RMB67.7 billion.

And net profit dropped sharply.

So investors are seeing two completely different stories.

🐻 The bear case:

Alibaba is spending enormous amounts of money on AI infrastructure, chips and data centres.

If AI monetisation takes too long, shareholders could face:

➡️ Higher depreciation

➡️ Higher infrastructure costs

➡️ Lower free cash flow

➡️ Lower margins

➡️ Lower returns on invested capital

This is basically the argument behind the current bearish debate.

But there is another side.

🐂 The bull case:

Alibaba isn’t simply spending money for the sake of spending.

It is trying to build a major AI + cloud infrastructure ecosystem.

If AI demand continues to grow, Alibaba can potentially monetise it through:

☁️ Cloud computing

🤖 AI models

💻 Enterprise AI

📊 AI applications

🛒 AI-powered e-commerce

📢 AI advertising

🔍 AI search

Alibaba has also committed around RMB380 billion over three years toward AI and cloud infrastructure.

The company expects AI-related investments to reach break-even within roughly three years.

So the big question isn’t simply:

“Is Alibaba spending too much?”

The better question is:

🔥 “What return will Alibaba eventually earn on today’s AI investment?”

If the returns are strong, today’s capex could eventually look like an investment in the company’s next growth cycle.

If the returns disappoint, the bears may have a very strong argument.

⸻

🟢 2. PDD Holdings — Pinduoduo + Temu

🛍️ The next stock I would put beside Alibaba is PDD Holdings (PDD).

PDD is interesting because it represents a very different e-commerce strategy.

Alibaba has historically focused on a broad ecosystem of merchants, consumers, cloud and digital services.

PDD’s strength has been:

💰 Low prices

🏷️ Discounts

🛒 Value-focused shopping

📱 Social commerce

🌎 Temu’s international expansion

And PDD’s latest results show why the stock is worth watching.

For Q2 2026, PDD reported revenue of RMB112.4 billion, up about 8% year over year.

However, net income declined 12% to RMB27.2 billion.

That is extremely important.

📈 Revenue is still growing.

📉 But profitability is under pressure.

The company is facing intense competition in China’s e-commerce market, while spending more on areas such as marketing and merchant support. (Reuters⁠)

This creates another version of the same investment question:

How much growth is worth paying for?

PDD can continue gaining users and transaction volume, but if it has to spend increasingly more money to maintain that growth, margins can suffer.

And then there is Temu.

🌎 Temu gives PDD an international growth opportunity that Alibaba’s traditional China e-commerce business doesn’t have in exactly the same way.

But international expansion comes with:

⚠️ Tariffs

⚠️ Regulation

⚠️ Logistics costs

⚠️ Competition

⚠️ Changing consumer behaviour

So PDD is not simply a China e-commerce stock anymore.

It is increasingly a global value-commerce story.

⸻

🟡 3. Tencent — The AI story may be even bigger than e-commerce

💬 Then we have Tencent.

Tencent is one of my favourite companies to compare with Alibaba because the business models are completely different.

Tencent has:

📱 WeChat

🎮 Gaming

📢 Advertising

💳 Fintech

☁️ Cloud

🤖 AI

And this gives Tencent multiple ways to monetise AI.

Imagine AI improving:

📱 WeChat search

📢 Advertising targeting

🎮 Gaming experiences

☁️ Enterprise cloud

💻 Productivity tools

🤖 AI assistants

That is why I don’t think investors should look at Tencent’s AI investment as simply another “AI spending” story.

Tencent already has a massive ecosystem where AI can potentially be integrated.

Tencent’s Q2 2026 revenue reached approximately RMB204.8 billion, up 11% year over year. (PR Newswire⁠)

But once again, AI investment is becoming a major financial consideration.

Tencent’s Q2 capital expenditure reached approximately RMB52.8 billion, up sharply from the previous quarter, and the spending pushed quarterly free cash flow into negative territory. (Tiger Brokers⁠)

So Alibaba and Tencent are now facing a similar question:

🤖 How quickly can AI investment turn into actual profits?

The difference is that Tencent has a very diversified ecosystem that can potentially distribute AI across multiple businesses.

⸻

🟠 4. JD.com — The “infrastructure” side of Chinese e-commerce

📦 I would also keep JD.com (JD) on the watchlist.

Why?

Because JD gives investors another way to look at Chinese e-commerce.

JD’s competitive advantage has historically been heavily connected to:

🚚 Logistics

📦 Fulfilment

🏪 Retail infrastructure

⚡ Delivery

🛒 Consumer services

This is important because China’s e-commerce battle isn’t just about who has the cheapest products.

It is also about:

Who can deliver faster, operate efficiently and create a better consumer experience?

That gives JD a different investment profile from PDD and Alibaba.

And interestingly, Michael Burry’s recent positioning has also brought attention to JD in the broader China internet discussion.

So rather than simply asking:

Alibaba or PDD?

I think investors should compare:

👉 Alibaba’s ecosystem

👉 PDD’s value-commerce model

👉 JD’s logistics infrastructure

That’s a much more useful framework.

⸻

🟣 5. Sea Limited — The Shopee opportunity outside China

🌏 And this is where I think the discussion gets really interesting for Singapore investors.

Sea Limited (SE) gives investors exposure to the broader Southeast Asian digital economy through:

🛒 Shopee

💳 Monee

🎮 Garena

Shopee is especially interesting because Southeast Asia’s e-commerce market is still developing.

Sea’s Q2 2026 numbers were very strong.

🔥 Total revenue increased 48.1% year over year to US$7.8 billion.

🔥 Net income increased 10.6% to US$458.1 million.

🔥 Shopee revenue increased roughly 48% to US$5.6 billion.

🔥 Shopee GMV increased about 28% to US$38.3 billion.

🔥 Core marketplace revenue, which includes transaction fees and advertising, increased about 66%. (Nasdaq⁠)

This is important because Shopee isn’t simply growing sales.

It is becoming better at monetising its ecosystem.

That means:

🛒 More orders

➡️ More GMV

➡️ More transaction fees

➡️ More advertising

➡️ More revenue

➡️ Potentially better operating leverage

And Sea isn’t only Shopee.

Monee’s Q2 revenue grew about 59%, while Garena revenue increased around 34%. (Nasdaq⁠)

So Sea gives investors a combination of:

🌏 Southeast Asian e-commerce

💳 Digital finance

🎮 Gaming

That makes it a very interesting comparison with China’s internet giants.

⸻

🔥 6. Now compare the five stocks

Here’s how I personally think about them:

Stock Main Theme What I Watch

🟦 Alibaba AI + Cloud + E-commerce AI monetisation & capex

🟢 PDD Pinduoduo + Temu Growth vs margins

🟡 Tencent WeChat + Gaming + AI AI ROI + monetisation

🟠 JD.com E-commerce + Logistics Efficiency + margins

🟣 Sea Shopee + Monee + Gaming GMV + monetisation

This is why I think a sector-level discussion is more useful than focusing on just one stock.

⸻

🧠 7. The biggest theme: AI is changing the economics

🤖 The most important thing happening across these companies is not simply that they are “using AI.”

They are spending billions of dollars trying to build AI infrastructure.

And that creates two possible outcomes.

🐻 Scenario 1 — AI becomes a margin drag

Companies spend huge amounts on:

💰 Chips

🏢 Data centres

⚡ Electricity

🖥️ Computing

👨‍💻 R&D

But monetisation remains weak.

Then investors may start asking:

“Why are we spending so much money for such little revenue?”

That could compress valuations.

⸻

🐂 Scenario 2 — AI becomes the next growth engine

The opposite happens.

AI improves:

📢 Advertising

🛒 E-commerce conversion

☁️ Cloud revenue

🎮 Gaming

🔍 Search

💻 Productivity

💳 Financial services

Then companies can eventually generate more revenue from the same user base.

That creates operating leverage.

And that’s where today’s huge AI spending could potentially become tomorrow’s competitive advantage.

⸻

🚀 8. What I would watch from here

I wouldn’t just watch the stock price.

I’d watch these numbers every quarter:

1️⃣ Revenue growth

Is growth accelerating or slowing?

2️⃣ Margins

Are companies sacrificing too much profit to maintain growth?

3️⃣ Capex

How much money is going into AI and infrastructure?

4️⃣ Free cash flow

Is the AI investment starting to generate cash?

5️⃣ AI monetisation

Is AI becoming a real business or just an expensive investment?

6️⃣ E-commerce GMV

For Alibaba, PDD, JD and Shopee, are transaction volumes still growing?

7️⃣ Advertising revenue

Can these platforms monetise their enormous user bases more efficiently?

⸻

💡 My personal conclusion

I don’t think the Alibaba debate should simply be:

“Burry is bearish, therefore Alibaba is bad.”

Nor should it be:

“Alibaba is investing in AI, therefore Alibaba will win.”

Both arguments are too simplistic.

The real question is:

🔥 Can Alibaba turn massive AI investment into higher future revenue and free cash flow?

And the same question can be applied across the sector.

For PDD:

🛍️ Can Pinduoduo and Temu maintain growth without sacrificing too much margin?

For Tencent:

🤖 Can AI improve WeChat, advertising, gaming and cloud economics?

For JD:

📦 Can logistics and operational efficiency create sustainable returns?

For Sea:

🌏 Can Shopee continue gaining Southeast Asian market share while improving monetisation and profitability?

That’s why I think the China + Asia internet sector is much more interesting than looking at Alibaba alone.

We are basically watching several different business models compete for the same megatrends:

🤖 AI

🛒 E-commerce

📱 Digital consumers

☁️ Cloud computing

📢 Digital advertising

💳 Fintech

🌏 Emerging-market growth

The winner may not necessarily be the company spending the most money.

The winner could be the company that achieves the best combination of:

Growth + margins + AI monetisation + free cash flow + valuation.

🔥 That’s the part I will be watching.

Which one would you choose today — BABA, PDD, TCEHY/0700, JD or SE? And why?

I’d love to hear different views from the Tiger Community 👇

This is my personal market analysis for discussion, not financial advice. Stocks can go down as well as up. Please do your own research and consider valuation, risk tolerance and position sizing before investing.

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