Friday, February 23, 2024
Stocks To Buy

The Magnificent 7 Stocks: 3 That Will Likely Get the Biggest Bidenomics Boost

Despite the term “Bidenomics” being mired in controversy, these three stocks stand to benefit from these economic policies

Source: Koshiro K /

Magnificent 7 stocks can benefit heavily from Bidenomics. The term “Bidenomics” refers to the various economic policies pushed and signed into law by the Biden Administration. President Joe Biden’s administration has signed several legislations, including the CHIPS Act, the Inflation Reduction Act (IRA), and the Infrastructure Investment and Jobs Act. All of which have earmarked billions of dollars of investment in various sectors related to renewable energy, semiconductor manufacturing, and infrastructure (traditional and digital).

Below are three Magnificent 7 stocks most likely to benefit from these government investments.

Magnificent 7 Stocks: Amazon (AMZN)

Amazon (NASDAQ:AMZN) is one of the world’s largest and most diversified companies, with businesses ranging from e-commerce to cloud computing to healthcare. The company has grown rapidly in recent years, generating over $554 billion in revenue and $20 billion in net income in the last twelve months.

The bipartisan Infrastructure Investment and Jobs Act passed in November 2021 set aside billions of federal funds to improve America’s airports, roads, and train networks. Amazon is largely a logistics business that relies on this infrastructure to move goods from point A to point B. Any improvements could help make logistics systems more fluid and increase the number of transactions on Amazon’s e-commerce platform, boosting key performance indicators (KPIs) in the long term.

AMZN’s shares have increased more than 60% over the past 12 months and could increase as the U.S. economy and infrastructure improve.

Alphabet (GOOG, GOOGL)

Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) needs a little introduction. The tech giant is not only the parent company of Google but also of several other businesses, such as YouTube and Google Cloud. Because the company has its hands in several technology verticals, it has been able to weather the macroeconomic environment better than other technology companies. In their second quarter, for example, Alphabet beat both Wall Street’s revenue and earnings estimates. Similarly, in the third quarter, revenue growth returned to the double-digit growth territory.

Alphabet could also stand to benefit from bipartisan infrastructure legislation. The bill will deliver $65 billion of funds to ensure all Americans have high-speed internet access. Alphabet’s Google Fiber has played an instrumental role in providing areas with high-speed internet, and this kind of legislation could help to expand Fiber’s reach.

Alphabet’s shares are trading up 50% in a year, and the stock trades at 23x forward earnings, which is lower than the other Magnificent 7 Stocks on this list.

Tesla (TSLA)

Tesla (NASDAQ:TSLA) is one of the largest players in the global electric vehicle market. The automaker has also been also been influential in creating the basic infrastructure for electric vehicle charging, ultimately tackling the EV market from different angles.

Tesla’s dense charging station network means it plays a critical role in building transport infrastructure. Lucky for Tesla, the Biden Administration has its back here. To help standardize EV charging stations, the infrastructure bill also sets aside billions to build a national network of chargers. As a part of a $7.5 billion plan, Tesla will open up its EV charging stations to competitors. The plan is twofold. On the one hand, Tesla’s network will morph into a universal EV charging station. Still, on the other hand, this could risk eroding its vehicles’ competitive edge over other EV makers who did not have the infrastructure.

Another piece of legislation Tesla benefits from is the IRA, which provides larger tax incentives to owners of electric vehicles. Since Tesla is the most popular EV brand in the states, these tax credits could entice consumers even more to purchase one of Tesla’s famed vehicles.

On the date of publication, Tyrik Torres did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Tyrik Torres has been studying and participating in financial markets since he was in college, and he has particular passion for helping people understand complex systems. His areas of expertise are semiconductor and enterprise software equities. He has work experience in both investing (public and private markets) and investment banking.

Source link

Share with your friends!

Products You May Like

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the latest stocks updates
straight to your inbox

Subscribe to our mailing list and get interesting stuff and updates to your email inbox.

x  Powerful Protection for WordPress, from Shield Security
This Site Is Protected By
Shield Security