Companies connected to the defense sector, energy and industrial conglomerates can benefit
Trump’s presidency, which is set to take over for the second time on January 20, 2025, evokes many emotions and many uncertainties. Still, regardless of who rules the United States, Wall Street ultimately pays attention to how American businesses are doing. Trump declares that he will bring “golden times” and strengthen the financial position of the United States not only as a country, but also as an empire made up of many private enterprises. No wonder it appeals to investors, it is about future technological and financial dominance.
By analyzing several trends, such as reindustrialization aimed at increasing the resilience of the US in the event of a conflict with China and making the West independent from Asian markets, or energy independence and investments in nuclear technologies supporting the development of artificial intelligence, we can come to the conclusion that investors will be willing to pay for Trump more for the shares of “made in America” companies“ with limited exposure to Asia and high economic resilience. These are companies that can thrive in almost any market environment, even theoretically “isolationist” or protectionist, and with the support of the new administration in Washington, they can expect unprecedented business growth.
This leads us to the conclusion that it is the sector of technological-industrial companies connected to the defense sector and strategic investments of the United States that may attract the attention of Wall Street. This includes not only defense industry suppliers, but also entire “groups of companies” involved in the military-industrial complex and infrastructure. Examples of such companies are suppliers of advanced electronic and mechanical components such as Heico, Curtiss-Wright, Teledyne Technologies and Howmet Aerospace. Other examples include Palantir, Axon Enterprise, Parsons and BWX Technologies, a company providing solutions and services for the civil and military nuclear sectors.
Naturally, the shares of the largest industrial conglomerates, such as GE Aerospace, Honeywell, 3M and Rockwell Automation, will attract interest. Tech companies, even if they don’t fall off Wall Street’s pedestal, may face challenges related to China-related export restrictions and uncertainties; investment in them, even if profitable, may be associated with an invisible but strategically higher level of risk. Their unique global position may become, in a sense, a “casualty” in the war for valuable resources such as computing power and data. In the context of relations between Washington and Beijing, the topic of Taiwan and the Panama Canal is also likely to return several times.
The expansion of the U.S. fleet and the development of underwater drones may boost the business of Huntington Ingalls, a major contractor for the U.S. Navy, which has struggled recently. American companies able to grow due to their special role in the American economy and industrial engineering can benefit from this. Indirect winners of increased volatility in global markets will be financial firms such as CBOE Global Markets and Chicago-based CME Group.
Small and medium-sized American companies also have a lot to look forward to. Attention will also be focused on the energy sector, which can benefit from deregulation and a return to traditional fossil fuels and from the revival of the nuclear sector. Just look at the share prices of companies like Vistra to realize that it’s not just Nvidia and the technology sector that offers investors incredible opportunities. Finally, Trump is also thinking about cryptocurrencies, with an emphasis on Bitcoin, for which 2025 looks optimistic.
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