Temu proved yesterday that it is coming for U.S. markets. The Chinese e-commerce disrupter has drawn significant criticism both from consumers and industry experts who have accused it of spying on users. But that hasn’t stopped the shopping app, owned by Chinese conglomerate Pinduoduo (NASDAQ:PDD), from working hard to gain a share of U.S. markets. Recently, this has included buying up a significant amount of Super Bowl ad space. The company turned many heads when it debuted a new commercial during yesterday’s game that repeated multiple times. So far, the initial investment is paying off. PDD stock has been rising steadily since markets opened today.
For Pinduoduo, this may be the start of a turnaround. It isn’t the first time the company has purchased Super Bowl airtime, but this year’s ad has definitely made a bigger splash. PDD stock has struggled so far this year. However, the post-Super Bowl focus on Temu may give it exactly the boost it needs to make up the ground it has lost in the past month.
What’s Happening With PDD Stock
The dust is still settling from Super Bowl LVIII, but PDD stock is enjoying the ride. As of this writing, it is up 4% for the day, wasting no time picking up momentum after markets opened. During the week leading up to the big game, trading had been volatile, struggling to rise again after shares began sliding late in January and continuing through the first week of February. However, PDD stock may have found the catalyst it needs to show investors why it shouldn’t be counted out.
Granted, the Temu Super Bowl commercial isn’t anything eye-catching. A typical animated graphic ad, it paled in comparison to the big-budget ads from companies such as State Farm and Verizon (NYSE:VZ). However, it still caught the attention of most viewers, likely because they were surprised to see a company like Temu dropping another Super Bowl commercial. But even so, there’s no denying that it has thrust Temu into the spotlight, at least enough to boost share prices. As Barron’s reports:
“Temu has emerged as a competitive threat not just to Amazon but also brick-and-mortar budget retailers like Dollar General. Even with analysts mixed over just how much pressure Temu will put on Amazon —the e-commerce giant’s latest outlook somewhat allayed competition fears from the Chinese rival, Deutsche Bank’s Lee Horowitz wrote in a note—the company’s Super Bowl spending will no doubt keep rivals on defense.”
Adding to the buzz is the fact that Temu didn’t just debut a Super Bowl ad. It also announced $15 million in giveaways and coupons, likely leading to a quick spike in sales. The company has not confirmed how much it spent on these ads, but CNN notes that Super Bowl commercials this year ranged between $6.5 million to $7 million for 30 seconds on air.
What Comes Next
Wall Street may be “mixed” on how Temu will impact Amazon (NASDAQ:AMZN) in the long term, but it remains highly bullish on PDD stock. It currently maintains a strong buy consensus, with 13 out of 14 analysts rating it as a buy. That number may increase as the momentum from the Super Bowl keeps Temu in the spotlight. It’s hard to say how long this will continue, but PDD stock is likely to keep rising for as long as it does.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
