Powell joined United from Crewe during the summer of 2012 for a fee of around £4million and the midfielder was rated as one of the finest young players in England at the time.
However, Powell has not been able to match the hype over the last few seasons and recently joined Championship side Hull City on loan after struggling for regular minutes on the pitch with the Red Devils.
Despite Powell's struggles, Davis remains a big fan of the 21-year old and believes he is as good as Spurs wonderkid Alli.
Davis said: "I would put him in the same bracket as Dele Alli. I know he hasn't shown that yet because of the problems he has had with injuries, but if he gets the chance to showcase his talent then there is no reason why he cannot be as good as that.
"Nick needs to play. He has had a few injures and that has restricted his chances to showcase his talent at Manchester United. He hasn't had the opportunity to do that and I am pleased he managed to get a move on deadline day.
"He has joined a great club in Hull. They are at the top end of the Championship and it will be good for him to be involved in a push for promotion. It could be a master stroke by Steve (Bruce) because he is getting a very talented player.
"I just hope Nick proves us right because we always felt he would go on to play for England and make an impact at the top level."