UBS reaffirmed JD.com’s ‘Buy’ rating but lowered the price target to $50 from $58 due to concerns about increased investments in the food delivery business.

UBS estimates JD.com may need to invest more to compete in food delivery, with expenditures potentially reaching RMB 10 billion, similar to Alibaba’s spending.

UBS anticipates JD.com’s food delivery investments to hit Rmb14 billion in Q3 before decreasing to Rmb11 billion in Q4. The firm maintains a Buy rating, expecting the company to sustain ROI in food delivery while leveraging volume growth.

UBS predicts JD.com will benefit from traffic growth in the beverages segment, especially among female users and lower-tier city residents, tapping into the rapid rise of daily and monthly active users.

JD.com, Inc. (NASDAQ:JD) is a prominent Chinese e-commerce company with operations in retail, technology, logistics, healthcare, and other sectors.

While JD.com holds investment potential, UBS suggests some AI stocks offer greater upside potential with less downside risk, recommending a report on the best short-term AI stock for those seeking undervalued opportunities.

Read more at Yahoo Finance: UBS Affirms JD.com’s (JD) ‘Buy’ rating Cuts Price Target on Spending Concerns