Alibaba Group Holding Ltd. received a rare downgrade from Wall Street on the same day it lost its crown as China’s most valuable e-commerce firm to one of its main rivals.

Morgan Stanley cut its rating on Alibaba’s American depositary receipts to equal-weight from overweight, lowering its price target to $90 from $110. That’s the first downgrade on the company’s US-listed shares since late June, according to data compiled by Bloomberg.

Alibaba is seeing a slower-than-expected turnaround, and its decision to withdraw the spinoff of its cloud business “brings uncertainty to the value-unlocking from reorganization,” analysts including Eddy Wang and Gary Yu wrote in a report dated Thursday.

At the same time, Morgan Stanley named PDD Holdings Inc. as its top pick in China’s e-commerce sector, viewing it as “best placed amid the increasingly entrenched trait of consumer price sensitivity.”

PDD — the eight-year-old upstart best known for its hit Temu marketplace — closed Thursday trading in the US with a market cap of about $196 billion, surpassing Alibaba’s value for the first time. PDD has surged more than 80% so far this year while Alibaba has dropped 15% in US trading.

While Jack Ma’s Alibaba has become an icon in the internet industry, dominating online shopping in China for more than a decade, PDD has been able win customers at home and expand abroad with cut-rate pricing.

Morgan Stanley also removed Alibaba from its China/HK Focus List, replacing it with mainland-listed Aluminum Corporation of China Ltd.

Brokers still remain largely bullish overall on Alibaba, whose ADRs have 44 buy ratings and eight recommendations at the equivalent of hold. That compares with 52 buys and three holds for PDD.