Market Uncertainty: Opportunities in Safe Stocks Amid Trade Wars

Market Uncertainty: Amid trade war panic, investors seek safe stocks. Companies like Alibaba, Visa, and Axon Enterprise may thrive due to strong market positions and revenue streams. Key details reveal how Chinese market focus could benefit Alibaba, while Visa and Axon's strong metrics highlight their resilience.

Date: 14-03-2025

AI Rating: 7

**Impact of Tariffs on Alibaba**
Alibaba Group Holdings demonstrates a unique position amidst the ongoing trade tensions. Although U.S. tariffs on Chinese imports could potentially impact many companies, Alibaba generates the bulk of its revenue from the Chinese market. Revenue data shows that out of $38.4 billion generated in the last three months of 2024, only $5.2 billion came from international commerce. Given the Chinese government's projection of 5% growth this year due to stimulus measures, Alibaba is positioned to potentially withstand external trade pressures better than its counterparts.

**Visa's Strong Financial Metrics**
Visa shows impressive financial health with net revenue increasing by 10% over the last three months of 2024, supported by a 16% rise in cross-border volumes year over year. With profit margins exceeding 50%, Visa appears to have substantial resilience against rising costs, reinforcing its position even in adverse economic conditions. Despite trading at 35 times its trailing earnings, Visa's solid profit metrics justify this premium.

**Axon Enterprise's Growth Potential**
Axon Enterprise, trading at 110 times its trailing earnings, has shown remarkable growth, with sales more than doubling from $863 million in 2021 to just under $2.1 billion last year. The company's profitability positions it well for continued scaling, which could lead to a reduction in its valuation multiple, attracting more investors. Additionally, with the U.S. government's aggressive stance on law enforcement, demand for Axon's products, such as body cameras and software solutions, is likely to increase, providing further growth opportunities.

Stocks: BABA V AXON