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Alibaba still hasn't run out of steam despite soaring nearly 70% in the first seven weeks of 2025, according to Scott Nations of Nations Indexes. The firm's president and chief investment officer joined CNBC's " Power Lunch " on Friday to offer his take on the Chinese e-commerce platform, along with a pair of other market movers. Here's what he had to say.
Alibaba Shares of Alibaba ended Friday almost 6% higher and reached a fresh 52-week high following a report in the Wall Street Journal that GameStop CEO and billionaire investor Ryan Cohen upped his personal stake in the company to about $1 billion. The stock gained 15% on the week and is ahead 45% in February alone. Despite the rally, Nations sees room ahead for Alibaba.
Capital spending will increase in coming years, but those assets will ultimately boost its artificial intelligence business. "The trader in me hates to say it's a buy, given what it's already done this year, but it is the best, or one of the best AI plays," Nations said. "Their AI ambitions are not going to be some giant hole in the ground that they're shoveling money into.
They have AI grafted onto a very strong existing business." Block Nations also highlighted fintech company Block as a buy, despite it tumbling 18% on Friday after fourth-quarter revenue and earnings missed analyst estimates. In its most recent quarter, Block earned an adjusted 71 cents per share on revenue of $6.
03 billion. Analysts polled by LSEG had expected 87 cents and $6.29 billion, respectively.
Other than the company's strong cost discipline, Nations pointed to Afterpay, Block's buy now, pay later business, as a major catalyst. Block will roll out Afterpay on its Cash App debit card this week. "The company is going to essentially change itself into essentially a lender," Nations noted, adding that that's "a better business to be in than the point-of-sale, point-of-purchase systems.
" However, given Block's "not particularly good" first-quarter guidance, Nations cautioned that he views the stock as a buy at the level around where it is currently trading, $68, with a stop loss at $60. "Trade with a stop, because if the company can't pull out of this nosedive, then you don't want to be along for that ride either," he added. UnitedHealth Group Finally, Nations was resoundingly bearish on UnitedHealth Group .
The stock sank 7% on Friday after the Wall Street Journal reported that the U.S. Department of Justice is investigating the insurer's Medicare billing practices , citing people familiar with the matter.
The investigation is centered around examining UnitedHealth's protocols for recording diagnoses that could lead to extra payments for the company's Medicare Advantage plans. Nations said that this was just the latest in a series of challenges for UNH. "This is a relatively slow-growth, low-beta name," the investor said.
"It now has a bunch of legal and PR problems, and this isn't its only legal problem. There also some antitrust problems. A quick resolution of the news about Medicare might be impressive but it doesn't mean that it's going to be smooth sailing, and investors just don't have to be along for this ride.
So it's a sell.".
