Yahoo shares dropped on Tuesday amid concerns that a change in tax rules could make the spinoff more expensive. Regardless of the tax outcome, Alibaba should climb higher as a standalone play, trader Dan Nathan said.
"My way to play this whole thing is playing Alibaba," he said, adding that the stock seems to have "really good support" at $90 per share—just below where it closed Wednesday after a nearly 3 percent gain.
Trader Guy Adami agreed, saying the stock "seems as though it wants to make that next leg higher."
Trader Tim Seymour added that Tuesday's Yahoo slide—which took more than $3 billion off its market value—was overplayed. Seymour—who has a long position in Yahoo—said it was a "great time" to buy the stock.
Technology company Hewlett-Packard reports quarterly earnings on Thursday. Its stock has fallen more than 17 percent this year.
HP has a chance to move higher after its earnings and could rise to $38 per share in the short term, said trader Guy Adami. It closed around $33 on Wednesday.
But HP stock may not react well after earnings, and investors should stay cautious, trader Pete Najarian said.
"I think it flatlines for a while," he said.
Shares of network security company FireEye rose nearly 2 percent Wednesday. Seymour—who owns the stock—said it makes an appealing play around $42, where it closed Wednesday.
FireEye shares have climbed nearly 34 percent this year.
— Reuters contributed to this report.
Tim Seymour is long AAPL, T, BAC, C, DIS, F, FEYE, GE, GM, GOOGL, INTC, JCP, SUNE and TUR. Tim's firm is long BABA, BIDU, CHL, MCD, NKE, NOK, SBUX, TSL and YHOO.
Long AMAT, AAPL, BABA, BAC, BMY, BP, CSX, DD, DISCA, DKS, FOXA, GE, KKR, KO, LLY, MBLY, MRK, MT, PEP and PFE. He is long calls AA, AAL, BBY, CBS, COP, CSX, DB, EJ, F, FL, GE, GS, HSBC, HZNP, IMAX, KO, KSS, LEN, MAC, MYL, NEE, NTAP, NUAN, OC, PFE, SYY, TEVA, TSX, UAL, UPS, UUP, VALE, VMW, VZ, WSM, XLF, XOM and ZIOP. Today, he bought WSM calls.
Dan Nathan is long GOOGL June call fly, TWTR, BBRY June calls, TLT June call butterfly, SO and INTC May /July put spread. He is short SO Aug call and CRM May Strangle.
Guy Adami is long CELG, EXAS and INTC. Guy Adami's wife, Linda Snow, works at Merck.