Editors’ Picks for Companies That Are Likely to Be in the Spotlight
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Stocks soared to record highs in November as Wall Street looked ahead to a second term for President-elect Donald Trump.
The S&P 500 climbed 5.7%, while the Dow Jones Industrial Average advanced 7.5% and the Nasdaq Composite added 6.2%. The Russell 2000, an index of small-cap stocks, surged nearly 11%, boosted by expectations for faster economic growth and lower taxes under Trump and a Republican-controlled Congress.
Market participants in December are likely to continue to pay special attention to Trump and his policy proposals. Though Wall Street will also be attuned to the near-term economic outlook, especially inflation and the labor market.
The Federal Reserve is scheduled to make its last interest rate decision of the year on December 18. Policymakers have emphasized lately that they’re in no rush to cut rates, but traders are still pricing in the likelihood of another quarter-point cut in December.
Below, we look at a few stocks that could see big price moves in the month ahead.
No S&P 500 stock has gained more from the re-election of Donald Trump than Tesla (TSLA), whose CEO Elon Musk has embedded himself in the president-elect’s inner circle after spending millions of dollars on his campaign.
Shares of the electric vehicle (EV) maker have soared nearly 40% since Election Day. That surge, which has pushed the company’s market value over $1 trillion, has come even as the incoming Trump administration has vowed to roll back government support for EVs, including a $7,500 tax credit.
Wall Street expects Tesla to benefit from Elon Musk’s sway with the future President, which he could exercise as both an informal advisor and the co-leader of the newly created Department of Government Efficiency. Trump’s transition team has already reportedly outlined plans to ease self-driving car rules, which could help make real Musk’s dream of launching a Tesla robotaxi service. Musk could also encourage Trump to exempt Tesla’s vehicles from proposed tariffs on goods from China.
Tesla stock will remain in focus this month as Trump continues to staff and define the priorities of his incoming administration.
Salesforce (CRM) reports earnings after markets close on Dec. 3, and its results could be an early test of tech’s ability to monetize artificial intelligence and justify record stock prices.
The enterprise software giant launched Agentforce, its generative AI-powered assistant, on October 25, with the goal of having its AI agents used 1 billion times by the end of 2025. Salesforce is reportedly hiring 1,000 sales reps to drive adoption of the new tool.
Other software companies have reported strong interest in AI agents, which operate with a greater degree of autonomy than chatbots like OpenAI’s ChatGPT. Crowdstrike (CRWD) executives said its AI agent, Charlotte, grew by triple digits in its most recent fiscal quarter.
Salesforce stock has risen about 25% this year after nearly doubling in 2023. Still, despite trading near a record high, Wall Street remains bullish on the stock, with two-thirds of analysts tracked by FactSet rating it a “Buy.”
Shares of Honeywell (HON) rose 14% in November, boosted by activist investor Elliott Investment Management’s disclosure mid-month that it had taken a $5 billion stake in the company.
Elliott has pushed Honeywell to follow the lead of fellow conglomerates General Electric and 3M, and break itself up into two publicly traded companies focused, respectively, on aviation and automation.
Wall Street has handsomely rewarded those industrial giants for their spin-offs. Shares of GE’s clean energy unit, GE Vernova (GEV), have soared about 150% since debuting in late March, and GE Aerospace (GE) has risen nearly 80% since the start of the year. 3M (MMM) stock has gained 50% since spinning off healthcare unit Solventum (SOLV).
Honeywell had already begun shedding businesses when Elliott took its stake. In October, the company announced plans to spin off its chemicals unit, a decision CEO Vimal Kapur said reflected its efforts to “further tighten Honeywell’s alignment to three compelling megatrends: automation, the future of aviation, and energy transition.” Last month, the company sold its personal protective equipment business to a private equity firm for more than $1 billion.
Shares of MicroStrategy (MSTR), the software company that has invested billions of dollars in Bitcoin, have risen 70% since Donald Trump’s re-election sparked a crypto rally.
MicroStrategy has spent more than $20 billion to amass a treasury reserve of 386,700 bitcoins worth more than $37 billion. As the world’s largest corporate holder of Bitcoin, Microstrategy stock has become closely correlated with the cryptocurrency.
Cryptocurrencies have surged in the wake of Donald Trump’s victory. He’s vowed to embrace the industry, promising to establish a strategic Bitcoin stockpile. Trump has yet to announce who will head the Securities and Exchange Commission and the Commodities and Futures Trading Commission, but both are expected to be far friendlier to the crypto industry than their predecessors.
The incoming Congress, which Coinbase CEO Brian Armstrong has called the “most pro-crypto Congress ever,” may also prioritize passing crypto legislation.
Similar to Tesla, Microstrategy’s stock could see price action this month as the details of Trump’s crypto agenda become clearer.
Super Micro Computer (SMCI), the AI server maker that was one of the stock market’s brightest stars earlier this year, is likely to remain in focus as it awaits word from Nasdaq about whether it can keep its listing on the stock exchange.
Supermicro shares had shed 85% of their value by the time the company in mid-November filed a plan with the Nasdaq to meet the exchange’s listing requirements. That plan, as of this writing, was still under review. Since the company filed the plan, the stock has moved back into positive territory for the year, but it’s still down 73% from its all-time high in March.
Supermicro’s problems began in August when the company delayed filing its full-year financial report with federal regulators. Reports that the Justice Department had opened an investigation into its accounting practices followed in September, and in October Supermicro’s auditor Ernst & Young resigned, citing concerns about accounting and board independence.
Supermicro last month found a new auditor, without whom its compliance plan likely would have been dead on arrival. In December, Nasdaq could approve Supermicro’s plan and give it more time to file its report. If it rejects the plan, however, Supermicro would have seven days to request a hearing to contest the decision, possibly dragging the company’s delisting risk into the new year.
Source: finance.yahoo.com