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Why JD.com Stock Jumped Today

By Joe Tenebruso – Aug 24, 2021 at 3:07PM

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The online retail giant delivered impressive sales growth in a challenging regulatory environment.

What happened

Shares of JD.com (JD -3.40%) soared on Tuesday after the Chinese e-commerce leader's second-quarter financial results surpassed investors' expectations. 

As of 2:33 p.m. EDT, JD.com's stock price was up more than 14%.

So what

JD.com's revenue surged 26.2% year over year to 253.8 billion yuan ($39.3 billion), besting analysts' estimates of 248.3 billion yuan. The increase was fueled by strong sales during its 618 Grand Promotion, a nationwide shopping festival that helped JD.com gain 32 million new users in the second quarter.

"JD has become China's leading supply chain-based technology and service company, serving a growing base of millions of partners and 532 million customers," CEO Richard Liu said in a press release.

A person drawing an upwardly sloping line labeled sales.

Image source: Getty Images.

Moreover, while JD.com's growth investments contributed to a 17% decline in its adjusted earnings per American depositary share (ADS) to 2.90 yuan ($0.45), that was above the consensus forecast of 2.60 yuan. 

Now what

Prior to today, JD.com's stock price was down 25% in 2021. A broadscale regulatory crackdown had raised fears among investors that the Chinese government would rein in the growth of its largest tech companies.

However, JD.com's strong second-quarter performance helped to alleviate those concerns. Additionally, after China passed a new data privacy law on Friday, the country is expected to slow its creation of new regulations. 

With their fears subsiding, investors bid up JD.com's share price sharply on Tuesday.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends JD.com. The Motley Fool has a disclosure policy.

Stocks Mentioned

JD.com Stock Quote
JD.com
JD
$58.32 (-3.40%) $-2.05

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