Tariffs and the threat trade wars pose on the global economy are weighing on the markets right now. How long this will last and how devastating the impact will be on businesses has many investors hitting the panic button.
There could, however, be some good, relatively safe stocks to buy amid all this turmoil. Three investments you may want to consider loading up on right now are Alibaba Group Holdings (NYSE: BABA) , Visa (NYSE: V) , and Axon Enterprise (NASDAQ: AXON) . Here's why I think these stocks can outperform the market in the months and potentially years ahead.
Alibaba Group Holdings
President Donald Trump has put tariffs in place on imports from China, which will raise costs for many companies operating in the U.S. and that depend on Chinese goods. But for Chinese-based Alibaba, the tech company makes the bulk of its revenue in China, which means U.S. tariffs may not have much of an effect on its overall business.
While they could still indirectly affect its operations due to worsening macroeconomic conditions, the business should still be in a much better position than many other companies. Of the $38.4 billion in revenue that Alibaba generated over the last three months of 2024, just $5.2 billion of that came from its international digital commerce group. U.S. sales will make up a portion of that, but the company doesn't specifically break out revenue by country on its earnings report. But one thing is for sure: Its e-commerce business is more heavily focused on the Chinese market.
This year, the Chinese government expects its economy to generate around 5% growth as it utilizes stimulus measures to help offset the impact of trade issues with the U.S. If it comes through and hits that number, Alibaba may be in a good position to do well this year.
Alibaba's stock is trading just 19 times its trailing earnings, and it could make for a solid option for growth investors to load up on right now.
Visa
One company that can do well regardless of macroeconomic factors is Visa. The credit card company will benefit whether businesses and consumers are spending money on domestic or international products. Even if economic conditions worsen globally, consumers may rely more heavily on their credit cards to fund their purchases than in the past.
During the last three months of 2024, Visa's net revenue increased by a solid rate of 10%, with cross-border volumes up 16% year over year. The company generates fantastic profit margins of more than 50%, giving it a substantial buffer to still post strong earnings numbers even if its costs rise.
While the stock trades at 35 times its trailing earnings, which can seem expensive given the company's mild growth rate, a premium is arguably warranted here given Visa's solid margins and strong leadership position in its industry.
Axon Enterprise
Axon isn't a cheap stock to own as it trades at a staggering 110 times its trailing earnings. But the reason I'm optimistic about its future is that with President Trump taking a tough stance on the border and overall law enforcement, Axon's business could stand to benefit from a sharp increase in demand. The company makes body cameras, sensors, tasers, and provides law enforcement with valuable software solutions.
Its sales have more than doubled in just three years, growing from $863 million in 2021 to just under $2.1 billion this past year. And now, the company is also profitable as well. As it continues to scale, the bottom line should improve, which will result in its price-to-earnings multiple coming down, likely attracting more value-oriented investors in the process.
Many investors may be worried about the impact of President Trump's aggressive stance on trimming costs and overhauling government spending, but one area that I believe may not be hit as hard is spending related to law enforcement, especially given the importance he is placing on securing borders and deporting illegal immigrants. Defense-related spending could very well increase over the next few years, and Axon may be well positioned to benefit from that.
Before you buy stock in Alibaba Group, consider this:
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