Investors are navigating significant economic uncertainty, fluctuating Federal Reserve policies, and the upcoming presidential election, all of which are contributing to heightened market volatility.

In light of the current economic backdrop in the United States, it may be prudent to consider diversifying into international stocks. Companies such as Alibaba Group Holding Limited (BABA), Rio Tinto Group (RIO), and Nokia Oyj (NOK) offer substantial growth potential and could provide a buffer against domestic market instability.

This year, political uncertainties are intertwining with immediate market volatility. Concerns about a potentially weakening U.S. economy and speculation on future Federal Reserve interest rate cuts have intensified. Recently, the S&P 500 experienced its worst weekly percentage loss since March 2023 following a disappointing jobs report.

The market’s downturn was driven by the August jobs report, which revealed that U.S. employers hired fewer workers than expected. The U.S. economy added 142,000 jobs, which is below economists’ expectations. The unemployment rate slightly decreased to 4.2% from 4.3%, as reported by the Bureau of Labor Statistics.

Matt Thompson, co-portfolio manager at Little Harbor Advisors, remarked, “This is an uncertain market. He added, “The market is essentially saying, we know risk is elevated, but … we don’t know what the problem is going to be.”

Investors could remain cautious until after the November election. In the meantime, exploring international stocks with strong growth prospects might be a wise strategy to mitigate domestic market risks.

With this in mind, let’s dive deeper into the fundamentals of the above-mentioned stocks in detail starting with #3.

Stock #3: Alibaba Group Holding Limited (BABA)

Based in Hangzhou, China, BABA offers technology infrastructure and marketing reach to help merchants, brands, and retailers connect with international users and customers. Its segments include China Commerce; International Commerce; Local Consumer Services; Cainiao; Cloud; Digital Media and Entertainment; Innovation Initiatives and Others.

On September 5, BABA partnered with Mastercard Incorporated (MA) and Cardless to introduce a co-branded credit card that rewards businesses for cross-border and domestic purchases on Alibaba.com. The partnership would simplify shopping, boost customer loyalty, and strengthen BABA’s global presence.

On the same day, BABA launched an AI-powered sourcing agent alongside new financial and logistics solutions. These innovations help small and medium-sized businesses increase efficiency and streamline cross-border trade. By enhancing trade processes, BABA can attract more global businesses and accelerate its international growth.

For the fiscal 2025 first quarter that ended June 30, 2024, BABA’s revenue increased 3.9% year-over-year to $33.47 billion. Its income from operations amounted to $4.95 billion. Plus, the company reported its adjusted EBITA at $6.20 billion for the quarter.

Moreover, non-GAAP net income and non-GAAP EPS came in at $5.60 billion and $0.28 for the quarter, respectively.

Analysts expect BABA’s revenue for the fiscal year ending in March 2025 to increase 8.9% year-over-year to $141.66 billion. Its EPS for the ongoing fiscal year is expected to grow 2.2% year-over-year to $8.79.

Shares of BABA have gained 11.9% over the past three months and 18.5% over the past nine months to close the last trading session at $84.69.

BABA’s POWR Ratings reflect its positive outlook. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

BABA has a B grade for Momentum, Sentiment, and Quality. Out of 39 stocks in the B-rated China industry, it is ranked #10.

To see BABA’s Growth, Value, and Stability ratings, click here.

Stock #2: Rio Tinto Group (RIO)

Headquartered in London, the United Kingdom, RIO explores, mines, and processes mineral resources. The company operates across Iron Ore; Aluminium; Copper; and Minerals Segments. In addition, it manages open-pit and underground mines, refineries, smelters, processing plants, power facilities, and shipping operations.

On August 15, RIO partnered with the Queensland Government to strengthen the heavy industrial manufacturing base around Gladstone and boost renewable energy investments. The partnership secures the future of Boyne Smelters Limited, Australia’s second-largest aluminum smelter, ensuring sustainability and long-term growth for RIO’s operations.

On July 19, RIO marked a milestone by shipping 4 billion tonnes of iron ore from Western Australia’s Pilbara to China, reinforcing its strong trade partnership. With half a century’s worth of customer needs, China is RIO’s largest customer, with approximately 250 million tonnes of iron ore shipped every year.

By keeping international shipments afloat, RIO’s exports to various countries around the world would aid the company in gathering a larger customer base and turning the company into a top metal ore shipment company globally.

For six months of fiscal 2024 that ended on June 30, 2024, RIO reported consolidated sales revenue of $26.80 billion, indicating a marginal year-over-year increase. The company’s operating profit for the same period rose 14% from the year-ago value to $8.26 billion.

In addition, profit after tax for the period and EPS came in at $5.89 billion and $3.56, up 19.1% and 13.3% year-over-year, respectively.

Street expects RIO’s EPS for the fiscal year ending in December 2024 to increase marginally year-over-year to $7.28.

Shares of RIO have surged 3.9% over the past five days to close the last trading session at $62.55.

RIO’s solid fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.

RIO has a B grade for Value, Quality, and Stability. It is ranked #3 out of 27 stocks in the Industrial – Metals industry.

In addition to the POWR Ratings we’ve stated above, we also have RIO ratings for Momentum, Sentiment, and Growth. Get all RIO ratings here.

Stock #1: Nokia Oyj (NOK)

Based in Espoo, Finland, NOK delivers mobile, fixed, and cloud network solutions globally. The company operates through four segments: Network Infrastructure; Mobile Networks; Cloud and Network Services; and Nokia Technologies. It also offers cloud and network services and licenses intellectual property, including patents and technologies.

On September 16, NOK partnered with NL-ix, an Internet Exchange provider, to deploy Nokia Deepfield Defender across NL-ix’s network. The deployment represents the largest anti-DDoS solution for an Internet Exchange Point (IXP) in Europe, enhancing protection for customers against DDoS attacks and reinforcing NOK’s commitment to network security.

On September 3, NOK signed a multi-year agreement with AT&T Inc. (T), a leading provider of telecommunications and technology services, to deploy next-generation fiber access technology.

NOK will supply its Lightspan MF and Altiplano platforms to support one of the world’s largest fiber networks. The collaboration would advance NOK’s mission to connect more people and businesses, offering a range of PON technologies, from 10/25G to future 50/100G PON, on a unified platform.

For the fiscal 2024 second quarter that ended on June 30, 2024, NOK’s net sales came in at EUR 4.47 billion ($4.95 billion). Its gross profit and operating profit were reported to be EUR 1.94 billion ($2.14 billion) and EUR 432 million ($478.47 million), respectively. Plus, as of June 30, 2024, NOK’s total assets stood at EUR 38.86 billion ($43.04 billion).

The consensus revenue estimate of $5.31 billion for the fiscal third quarter (ending September 2024) represents a marginal increase year-over-year. The consensus EPS estimate of $0.07 for the current quarter indicates a 40.5% growth year-over-year.

Shares of NOK have gained 13.2% over the past three months and 29.2% over the past nine months to close the last trading session at $4.20.

It’s no surprise that NOK has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.

NOK has a B grade for Value and Sentiment. Within the Technology – Communication/Networking industry, it is ranked #2 out of 47 stocks.

Beyond what we stated above, we also have given NOK grades for Growth, Momentum, Stability, and Quality. Get all the NOK ratings here.

What To Do Next?

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BABA shares fell $0.77 (-0.91%) in premarket trading Monday. Year-to-date, BABA has gained 10.59%, versus a 18.89% rise in the benchmark S&P 500 index during the same period.

About the Author: Aanchal Sugandh

Aanchal's passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor's degree in finance and is pursuing the CFA program. She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns. More...

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