Alibaba sales surge. One trader sees this as just the beginning.

Alibaba is surging after posting double-digit quarterly revenue growth early Thursday. This is just the beginning of its growth, according to one trader.

Boris Schlossberg, managing director of FX strategy at BK Asset Management, told CNBC's "Trading Nation" on Wednesday that he expects big things from the Chinese e-commerce company. Here's why:

  • Alibaba is one of the biggest companies in the world, with a market cap of nearly $500 billion, but because it has its hands in so many businesses it can be hard for investors to understand its potential.
  • It is a major player in everything from business to business sales, online shopping and payments, the next generation of brick-and-mortar stores and even cloud computing. But, when you strip away its financials, the company makes all of its profits from its core commerce businesses.
  • It has been able to produce stellar results growing revenue 61 percent on a year-over-year basis and increasing free cash flow by more than 400 percent in the past 4 years.
  • The stock has sold off on recent concerns about U.S.-China trade tensions and if relations continue to sour between the two largest economies in the world, Alibaba may feel more downside heat in the near term.
  • Alibaba is ultimately a bet on the growth of the Chinese middle class, and with its massively dominant position in the world's most populous economy, it is one of the purest long-term bets on global growth in a consumer market that still has many years of double-digit gains ahead of it.
  • The stock has fallen below the $200-per-share mark on U.S.-China concerns, and if it slips toward $150 on any disappointing earnings news, it would offer a great buying opportunity for investors with a three- to five-year horizon.

Bottom line: Alibaba may be under pressure right now, but its future looks bright.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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