Three High-Growth Stocks That Could Thrive Under a Trump Presidency

The anticipated "Red Wave" has become a reality, leading to a pivotal shift in U.S. leadership as Donald J. Trump is now the President-elect. This change is expected to bring about various transformations, prompting investors to seek out stocks that may benefit over the next four years.

One crucial factor gaining traction in recent years is the rapid adoption of artificial intelligence (AI), which many believe will catalyze the fourth industrial revolution. Despite some challenges in the early stages of generative AI, there is significant potential for this technology to automate routine tasks and, in turn, enhance productivity and profitability.

As the technology continues to develop, analysts are forecasting trillions of dollars could be added to the global economy, presenting lucrative opportunities for those leading in this space. Let's explore three growth stocks that analysts suggest could prosper under a Trump administration.

1. Microsoft

Microsoft (MSFT) has been quick to leverage AI advancements. The tech giant recognized the potential of AI early on and made substantial investments in OpenAI, the organization behind ChatGPT. This investment led to the creation of Copilot, a suite of digital assistants utilizing generative AI. Microsoft CEO Satya Nadella stated that these tools have been incorporated by clients across various industries.

For instance, Microsoft reported that the deployment of Microsoft 365 Copilot within one organization saved employees an impressive three hours weekly on average. Additionally, demand for Microsoft's Azure cloud services surged, realizing a 33% increase in revenue year over year, with AI service requests contributing significantly.

Since the beginning of last year, Microsoft shares have soared by 74%, coinciding with the rise of AI technologies. Analysts from UBS predict that the ongoing AI adoption trend will be further propelled by Trump's leadership, allowing Microsoft to capitalize on this momentum.

2. Palantir

Palantir Technologies (PLTR) has been a significant player in the AI field for over two decades, now focusing on generative AI, which has investors particularly enthusiastic. The development of its Artificial Intelligence Platform (AIP) enables companies to create AI-driven solutions for various operational challenges. This move has led to a staggering 765% increase in stock price since last year.

A compelling aspect of Palantir's business model is the offering of "boot camp" sessions. These sessions connect clients with Palantir engineers to optimize AI implementations, resulting in numerous lucrative deals shortly thereafter. In the last quarter alone, the company secured 104 contracts worth over a million dollars each.

During the third quarter, Palantir noted a remarkable 54% year-over-year growth in its U.S. commercial revenue. Given the anticipated emphasis on AI initiatives within the government under a Trump presidency, analysts like Dan Ives from Wedbush believe that Palantir stands to gain significantly.

3. Tesla

Tesla (TSLA), primarily seen as an electric vehicle manufacturer, also excels in AI technology. The company has built an extensive database by gathering data from its numerous vehicles on the road, which is envisioned to support its self-driving Robotaxi fleet in the future.

CEO Elon Musk's strong ties to Trump, including public appearances and financial backing, have led many to think the new administration will be favorable to Tesla's ambitions in autonomous driving. Following Trump's election victory, Tesla's stock experienced a notable uptick.

Wedbush analyst Dan Ives noted that while the outlook could be mixed for the electric vehicle industry as a whole with potential changes to incentives, Tesla's unique position and competitive advantage in the market would remain significant. Perhaps more importantly, adjustments to tariffs could make foreign competitors less viable in the U.S. market.

In summary, the regulatory landscape under a Trump presidency could create opportunities for Tesla and its stockholders.

Danny Vena holds shares in Microsoft, Palantir Technologies, and Tesla. The authors' opinions do not reflect any affiliations with these companies.

Stocks, Trump, AI