Yahoo Finance

Time now for some of today's trending tickers. This morning we're watching Alibaba, eToro and Coinbase. First up, Baba missing estimates for physical fourth quarter with revenue growing a disappointing 7% from a year earlier. Analysts were hoping the Chinese e-commerce giant bet on AI would provide a bigger boost. The shares down about seven and a half percent. And this is really an indicator of the Chinese consumer and the health of that consumer as well. Obviously not holding up given the fall here and the miss on fourth quarter revenue. But Tim, I want to bring you in. How do you think about a name like Baba amid the uncertainty on the Chinese economy and American Chinese relationship?

Well, Maddie, I mean obviously this was disappointing growth today. But I think you do need to step back and and look at the different business units retail. There's a lot of competition, might be challenging. But I think what what makes us excited on the stock is this is literally the the the potential to own the AI infrastructure market in China. The the long term growth potential is a story you want access to. And we sit here looking at the stock trading 13 times earnings. That's probably undervalued for the growth potential that we see there. So yes, it's not what we wanted to see in the short term. They've disappointed several of the last few quarters, but long term, I think you have to take a step back and look at the the major tailwinds that the stock has.

So you think of it more as an AI play than a Chinese economy impacted name?

I think the e-commerce side is going to be a little tougher. There's a lot more competition on that side. But yes, you know, China is looking to scale up AI just like the US is if not faster. So you want to be in a name like that, a lot of tailwinds from that side of the business.

All right. Well, let's move to another stock. We are watching here eToro pulling back after its strong Nasdaq debut. The stock and crypto trading app raised nearly $310 million in its initial public offering on Tuesday. The shares down a little over six and a half percent at the moment. And Tim, I had an analyst tell me this is the next Robin Hood yesterday, which is up over 50% year to date. Is this a normal pullback on day two, or is this something more sinister?

Well, I think if you look at the rally yesterday, it gave us a lot of confidence that the IPO market is very strong. Everybody was excited about it coming into this year. Tariffs kind of killed that. This was not the first time they tried to go public. They were very selective about when they did it. And I you know, look at the rally in the context of the last two days. You know, we think that that's still very strong. And again, they're aligning with some of these longer term trends, more trading crypto, you know, a lot to like about the stock. But I think it's more about what it tells us about the health of the IPO market.

Certainly, yeah, that has been under a lot of pressure. So it'll be interesting to see if we start to get a little bit more on that. And but finally here, let's look at Coinbase saying hackers bribed its workers outside the US to steal customer data, then demanded a $20 million ransom. The company saying it has not paid the demand and is cooperating here with law enforcement. The crypto exchange also saying it could cost up to $400 million to fix the problem. The shares down a little over five and a half near five and a half percent. And initially, off the back of this news, we didn't see too much of a share reaction, obviously the huge run up in coin, also because it was just added to the S&P 500. How are you thinking about the risks? I mean, this is a classic crypto risk that is unfolding here.

Yeah, you have to understand the risks as as an investor. And I think this is just growth pains, right? It's an industry that's developing. You're starting to see, you know, these other risk creep in, how do you mitigate them? But again, I would say you look at the long term trend, more and more investors, whether it be institutional or retail like we talked about earlier, want access to the space. This is a good way. Coinbase is a leader here. And when you look at security, they're leading the charge as well. So short term blip here, it's going to happen as the industry grows and evolves. But I don't think it changes the long term growth narrative of the stock.