Stock trader on the New York Stock Exchange.
Michael M. Santiago | Michael M. Santiago Getty Images News | Getty Images
Share prices of many major U.S. companies have been rising since the presidential election.
The 10 best-performing stocks S&P 500 Index Data from S&P Global Market Intelligence, which analyzed returns based on closing prices from Nov. 5 to Nov. 20, shows the company has returned 18% or more since Election Day.
Two companies – Axon Enterprise (AXON) and Tesla (TSLA), which provide law enforcement technologyTeslaThe electric car maker led by President-elect Donald Trump’s adviser Elon Musk’s The stock price rose more than 35%.
By comparison, the S&P 500 has gained about 2% over the same period.
Buying for short-term gains ‘usually a bad idea’
Jeremy Goldberg, a certified financial planner, portfolio manager and research analyst, said investors should be cautious about buying individual stocks based on a short-term boost. Professional Advisory Services, Inc. ranks No. 37 on CNBC’s annual list of the Top 100 Financial Advisors.
“That’s usually a bad idea,” Goldberg said. “Momentum is a powerful force in markets, but relying solely on short-term price movements as an investment strategy is risky.”
Goldberg said investors should understand what’s driving this trend and whether the factors driving up stock prices are sustainable.
Why are these stocks beating the market?
Investment experts say part of the reason for the stock market’s high returns is that the Trump administration’s policy stance is expected to benefit certain companies and industries.
Jacob Manoukian, head of U.S. investment strategy at JPMorgan Private Bank, said deregulation and a softening of views on mergers and acquisitions were two “key” themes driving bullish sentiment following Trump’s victory.
Relying solely on short-term price movements as an investment strategy is risky.
Jeremy Goldberg
Portfolio Manager and Research Analyst at Professional Advisory Services, Inc.
In addition, experts say U.S. regulators are likely to be significantly less stringent in allowing potential mergers during Trump’s second term.
Companies in the streaming ecosystem—such as Warner Bros. Discovery (World BD), which owns the Max streaming service, and Disney+ owner The Walt Disney Company (DIS) – which they say could be a beneficiary of looser rules around consolidation.
Optimistic earnings and artificial intelligence
For some stocks, the outperformance was tied to upbeat quarterly earnings results or guidance some companies reported around or after Election Day, experts said.
Many of these companies see artificial intelligence as a growth driver.
For example, Palantir Technologies (PLTR), Treasurer and CFO David Glazer said demand for its artificial intelligence platform was “unprecedented” in the third quarter, helping to deliver “exceptionally strong” earnings Tell Investors November 4th.
Likewise, Axon’s Nov. 7 earnings beat analysts’ expectations resultGoldberg said officials promoted its “artificial intelligence era plans” and raised profit guidance.
According to data from S&P Global Market Intelligence, from November 5 to November 20, the stock prices of Axon and Palantir rose by 38% and 22% respectively.
Experts say some companies benefit from a combination of policy and profitability.
Data Hall B at Facebook’s Fort Worth, Texas, data center is packed with rows of servers.
Paul Mosley/Fort Worth Star-Telegram/Tribune News Service via Getty Images
Take energy supplier Vistra SA (VST) as an example. The company’s stock price rose 27% after Election Day.
Stacey Doré, Vistra’s chief strategy and sustainability officer, said Vistra is working with large data centers (or “hyperscale data centers”) in Texas, Pennsylvania and Ohio. ) to negotiate to build or upgrade natural gas and nuclear power plants. explain during the company’s third-quarter earnings call on November 7.
Technology companies are building more and more of these data centers to power the artificial intelligence revolution, and require more and more energy to run them.
“Elon Musk Premium”
There’s also the Elon Musk factor.
Goldberg of Professional Advisory Services said Tesla shares gained a “Musk premium” as a result of Trump’s victory.
Tesla CEO Musk is one of Trump’s closest confidants Top campaign supporter. Trump tapped him to co-lead the newly created Department of Government Effectiveness. Electric car maker stocks Soared 14% The day after the election, it reached almost 30% by the weekend.
President-elect Donald Trump and Elon Musk talk ringside during UFC 309 at Madison Square Garden on November 16, 2024 in New York.
Chris Unger | Ultimate Fighting Championship | Getty Images
But experts say there are additional bullish factors for Tesla stock.
First, Trump wants to end the $7,500 federal tax credit for electric vehicles. Repealing this policy is expected to be injured Tesla’s electric car rival.
Tesla has also been developing driverless car technology. During Tesla’s most recent earnings call, Musk said he would use his influence in the Trump administration to establish a “federal approval process for self-driving vehicles.”
About The Author
