Stock trader on the New York Stock Exchange.
Michael M. Santiago | Getty Images News | Getty Images
Since the presidential election, the stock prices of many large American companies have increased.
Top 10 performing stocks S&P500 index Data provided by S&P Global Market Intelligence, which analyzed returns based on closing prices from Nov. 5 to Nov. 20, showed a return of more than 18% since Election Day.
Law enforcement technology providers Axon Enterprise (AXON) and Tesla (TSLAShares in the electric car maker, led by President-elect Donald Trump's adviser Elon Musk, rose more than 35%, according to S&P Global Market Intelligence.
In contrast, the S&P 500 index rose about 2% over the same period.
Buying for short-term gains is 'usually a bad idea'
Jeremy Goldberg, a certified financial planner, portfolio manager and research analyst, said investors should be wary of buying individual stocks based on short-term boosts. Professional Advisory Services, Inc. is ranked #37 on CNBC's annual Financial Advisor 100 list.
“Usually that's a bad idea,” Goldberg says. “Momentum is a powerful force in markets, but relying solely on short-term price movements as an investment strategy is risky.”
Goldberg said investors need to understand what's driving this movement and whether the factors driving stock prices are sustainable.
Why did these stocks outperform?
Investment experts say the stock's strong returns were driven by the Trump administration's policy stances that are expected to benefit some companies and industries.
Jacob Manoukian, head of U.S. investment strategy at JPMorgan Private Bank, said deregulation and a flexible view of mergers and acquisitions are two “key” themes driving the bullish mood after Trump's victory. said.
Relying solely on short-term price movements as an investment strategy is dangerous.
jeremy goldberg
Portfolio Manager and Research Analyst at Professional Advisory Services, Inc.
Additionally, experts said that during President Trump's second term, U.S. regulators are likely to become significantly more relaxed about allowing potential mergers.
Companies participating in the streaming ecosystem — Warner Bros. Discovery (WBD) owns the Max streaming service and Disney+ owner The Walt Disney Co. (DIS)—may have benefited from loosened rules on integration, they said.
Rosy profits and AI
Experts said the outperformance of some stocks was tied to rosy quarterly results and guidance some companies released around or after Election Day.
Many of these companies cite artificial intelligence as a driver of growth.
For example, Palantir Technologies (PLTR), Treasurer and CFO David Glaser said “unprecedented” demand for the AI platform in the third quarter helped deliver “very strong” earnings. said Investors on November 4th.
Similarly, Axon's results on Nov. 7 beat analyst expectations. resultGoldberg said officials are touting the company's “AI-era plans” and raising its revenue outlook.
Axon and Palantir stock prices rose 38% and 22%, respectively, from Nov. 5 to Nov. 20, according to S&P Global Market Intelligence.
Experts say some companies benefited from a combination of policy and profits.
Data Hall B at Facebook's Fort Worth data center in Texas is lined with servers.
Paul Moseley/Fort Worth Star-Telegram/Tribune News Service (via Getty Images)
Take energy provider Vistra Corp. (VST), for example. The company's stock price rose 27% after voting day.
Vistra is in talks with large data centers, or “hyperscalers,” in Texas, Pennsylvania and Ohio to build or renovate gas and nuclear power plants, according to Vistra's top strategy and sustainability statement. says Stacey Dore, head of sex. said This was made at the company's third quarter financial results announcement on November 7th.
Technology companies are building more and more such data centers to power the AI revolution, and they need to source more and more energy to run them.
“Elon Musk Premium”
And there's also the Elon Musk factor.
Professional Advisory Services' Goldberg said Tesla stock received an “Elon Musk premium” with Trump's victory.
Tesla CEO Musk was one of President Trump's Top supporters of the campaign. President Trump named him co-director of the new Department of Government Efficiency. Electric car manufacturer stock prices 14% jump It rose to nearly 30% the day after the election, and nearly 30% over the weekend.
President-elect Donald Trump and Elon Musk speak ringside during the UFC 309 event at Madison Square Garden on November 16, 2024 in New York.
Chris Unger | UFC | Getty Images
But experts say there are further tailwinds for Tesla stock.
As an example, President Trump wants to eliminate the $7,500 federal tax credit for EVs. Abolishing that policy is expected to get hurt Tesla's EV rival.
Tesla is also developing self-driving car technology. During Tesla's recent earnings call, Musk said he would use his influence within the Trump administration to establish a “federal approval process for self-driving cars.”
