Shares of the Chinese e-commerce company JD.com (JD 4.83%) are up 4.4% from 1:54 p.m. ET on Thursday, according to figures from S&P Global Market Intelligence. The move – unlike rivals AlibabaToday’s drop in share price is a reaction to the company’s surprisingly solid second-quarter results.

JD.com regains investors’ favor

JD turned revenue of just over $4 billion into earnings per share of $1.13 in the three months ended June. Revenue rose only slightly year-on-year but still beat expectations. Profit, meanwhile, was significantly better than analysts’ estimates and nearly doubled JD.com’s profit from the comparable quarter of 2023.

Although online retail is by far JD’s largest single source of revenue and profit, its logistics divisions actually recorded the largest revenue and profit growth in the second quarter.

It’s a welcome report and a good reaction for shareholders who watched JD stock retreat from its May high following the company’s first-quarter earnings release. While those results also beat expectations thanks to 7% revenue growth, the run-up before the report made JD stock vulnerable to profit-taking in retrospect, regardless of how well or poorly the company performed in that quarter.

However, Thursday’s big jump is also further evidence that this e-commerce stock is finally ready to reverse its ongoing decline from its 2021 peak. At least JD.com shares are no longer losing ground in the long term.

Today’s move cements the emerging bull sentiment

Yes, that’s the forecast, but with a significant caveat. Investors looking to participate in this burgeoning recovery should know that continued volatility is almost certain, even if it is ultimately positive for JD.com stock. It won’t be easy to own this stock. And it still carries above-average risk.

However, trends are turning in JD.com’s favor again. China’s retail sales rose 2.7% last month, against forecasts of just 2.6%, continuing a 17-month winning streak. some Degree of improvement from last year. Reuters further reports that China’s GDP should grow 4.8% in the third quarter, on track for 4.5% growth for the whole of 2025. While some observers have expressed doubts, the country’s current economic growth appears to be fueling expected consumer spending, and this is unlikely to change in the foreseeable future.

That could help: JD shares are currently a bargain at 7.6 times next year’s expected earnings, so the stock has plenty of room to absorb future volatile results.