Trump Win: What It Might Mean for Investors

Trump Win: What It Might Mean for Investors

With Donald Trump having secured a decisive victory yesterday, investors are weighing the impact his proposed economic policies could have. Trade is central to Trump’s strategy, which includes higher, broader tariffs to drive reshoring and stimulate domestic manufacturing. His agenda also features tax cuts for individuals and corporations, maintaining a strong dollar as the global reserve currency and advocating for lower interest rates. Bank stocks rallied yesterday, as did US automakers, while bitcoin hit a record high.

Tesla Surges as Musk Bet Pays Off

Tesla [TSLA] shares popped 15.1% to $289.34 in premarket trading Wednesday following the election result, with the electric vehicle (EV) maker seen as a potential beneficiary under Trump’s administration. CEO Elon Musk contributed over $130m to the campaign and publicly supported Trump on social media platform X.Wedbush analyst Dan Ives said on X that “we believe a Trump win is a negative for the EV industry as the EV rebates/tax incentives get pulled, however for Tesla a huge positive for scale/price advantage,” adding that the result could add $40–50 to TSLA stock.

We Might Never Top the iPhone

Apple [AAPL] has cautioned investors that future products might not match the profitability of its iPhone business, as it ventures into emerging areas like artificial intelligence (AI) and virtual reality headsets. In its latest annual report, Apple listed this possibility among its “risk factors”, acknowledging that new offerings could lead to “lower revenues and lower profit margins,” potentially impacting its business and financial results, the Financial Times reported. 

Shining a Light on LUMN Stock

Lumen Technologies [LUMN] has reported Q3 2024 revenue of $3.22bn, down 11.5% year-over-year, with EPS at -$0.13, widening from -$0.09 in the previous year. Despite this, Lumen raised its annual free cash flow forecast, buoyed by $8bn in AI-driven contracts with cloud giants Alphabet [GOOGL], Microsoft [MSFT], Amazon Web Services [AMZN] and Meta [META]. These partnerships are vital for connecting data centers required for AI applications like ChatGPT. Last month, OPTO detailed what made Lumen an “unsexy” but attractive stock.

SMCI Miss Compounds Woes

Super Micro Computer [SMCI] saw shares drop 10% in late trading on Tuesday after releasing preliminary fiscal Q1 results that missed previous guidance. The AI server maker reported expected earnings between $0.75 and $0.76 per share on an adjusted basis, with revenue estimated at $5.9bn–6bn, below the initial $6bn–7bn guidance and analyst expectations of $0.74 EPS on $6.79bn revenue. The results are preliminary and unaudited, due to its auditor EY’s recent resignation.

Investors Reassured by Novo Nordisk Earnings

Novo Nordisk [NVO] maintained strong sales growth in Q3, driven by high demand for its weight loss and diabetes drugs, Ozempic and Wegovy. The company reported revenue of DKK71.3bn, marking a 21% increase year-over-year, though slightly below analysts’ forecasts. Operating profit hit DKK33.8bn, aligning with expectations. Novo Nordisk now anticipates a 23–27% sales growth at constant exchange rates, slightly narrowing previous projections. Shares rose 8% as the results alleviated concerns of declining demand, following weaker results from competitor Eli Lilly [LLY].

ENVX Stock: Analysts Forecast 994% Gains

A battery company that specializes in the production of silicon lithium-ion batteries that are used in wearables, smartphones and a range of other devices, Enovix [ENVX] is early on its growth trajectory. Analysts have lofty expectations for its revenue and share price over the next 12 months; however, ENVX stock was up and down around its earnings in October, as positivity was tempered by a surprise capital raise. OPTO delves into the investment case for the stock and compares it to two key competitors.