5 Stocks to Buy for a Trump Presidency

Donald J. Trump was sworn in as 47th President of the United States on January 20, reigniting a bullish flame in the stock market that had fizzled late last year.

Indeed, the major U.S. equity indexes are trading back near record highs as of this writing thanks in part to a number of well-received announcements coming from the White House.

In addition to the Trump team kicking the tariff can down the road – recent reports indicate a potential 10% tariff on China and a roughly 25% tariff on Canada and Mexico starting February 1 – which has eased inflation fears, the president unveiled a $500 billion artificial intelligence (AI) infrastructure initiative.

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The Stargate Project, which is a joint venture between OpenAI, Oracle (ORCL), SoftBank and MGX, "has the potential to inject significant growth for ... all the parties involved as more AI use cases emerge and we shift to a Physical AI world, with AI set to become embedded across more industries and enterprises," says CFRA Research analyst Angelo Zino.

Presidential policies and initiatives such as these create catalysts for certain sectors and industries, AI stocks in this case, even as U.S. presidents have little direct impact on the stock market over the long term.

Another example of this is Trump's reversal on cryptocurrency. During his first administration, Trump made clear he was not a fan of digital assets.

In July 2019 he posted on what was Twitter and is now X that the value of cryptocurrencies are "highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity."

But in August Trump took to X to announce he will unveil a "plan to ensure the United States will be the crypto capital of the planet," though the details have yet to be announced. In September he promoted a new cryptocurrency business, and in October World Liberty Financial launched its own token.

In November, Trump won the election. And he nominated Paul Atkins to lead the Securities and Exchange Commission, noting in his announcement that the former SEC commissioner "recognizes that digital assets & other innovations are crucial to Making America Greater than Ever Before."

Then, in December, bitcoin broke the $100,000 barrier for the first time, the market perceiving that a second Trump administration and its initiatives and policies will create tailwinds for cryptocurrency. Price action for bitcoin and crypto ETFs reflects this bullishness.

But AI and crypto aren't the only areas of the market that could get a lift from Donald Trump's victory. Indeed, here are five stocks to buy for a Trump presidency, representing the banking, defense, energy, steel and prison industries.

Data is as of January 21.

JPMorgan Chase

• Market value: $735.9 billion
• Sector: Financial services
• Industry: Banks - Diversified
• One-year total return: 58.0%
• Three-year total return (annualized): 25.4%
• Five-year total return (annualized): 20.0%

JPMorgan Chase (JPM) reported total assets of $4.0 trillion as of December 31, 2024. That makes it the biggest U.S. bank – and one of the largest financial institutions in the world.

During the first Trump administration, the 45th president was relatively good to the banking industry, favoring deregulation and a hands-off approach to overseeing financial institutions.

"Trump was also able to enact significant changes throughout the banking industry during his tenure in the White House," wrote American Banker contributor Frank Gargano in July.

Gargano identified several steps Trump took to cut red tape for banks, such as unwinding the Department of Housing and Urban Development's Affirmatively Furthering Fair Housing rule and signing a regulatory relief bill that included numerous pro-banking reforms.

During the campaign, JPMorgan CEO Jamie Dimon gave some advice to both Trump and the Democratic nominee, Vice President Kamala Harris: The CEO wants to see the winner unite the country by being completely transparent with the American people about its problems and listening to input and analysis from both the left and the right.

"America has all the advantages, and we can win the future with smart policy, courageous leaders and everyone with a seat at the table moving in concert," Dimon wrote in an August 2 op-ed for The Washington Post.

As for the financial stock, analysts generally like it. Of the 23 analysts following JPM that are tracked by S&P Global Market Intelligence, seven say it's a Strong Buy, seven have it at Buy, seven call it a Hold and two say it's a Strong Sell. This works out to a consensus Buy recommendation.

Speaking for the bulls is Argus Research analyst Stephen Biggar, who has a Buy rating on the Dow Jones stock.

"We like JPM among the large banks given its better lending-growth profile, strong credit-card franchise, and expected market-share gains in its capital-markets businesses," the analyst wrote in a recent note, adding that JPM is undervalued at current levels.

Lockheed Martin

• Market value: $119.0 billion
• Sector: Industrials
• Industry: Aerospace & Defense
• One-year total return: 13.5%
• Three-year total return (annualized): 13.8%
• Five-year total return (annualized): 6.3%

Over the years, the consensus has been that defense stocks benefit from Republican administrations. Trump is especially hawkish about defending American interests.

Further, he's not inclined to continue providing military support to NATO members that don't spend 2% of their gross domestic product (GDP), as the alliance requires. He'd like to see the amount raised to 3%.

Between the wars in Ukraine and Israel, global conflicts have become a part of everyday life. And continued geopolitical uncertainty could benefit Lockheed Martin (LMT), which manufactures F-35 fighter aircraft.

Although there were some concerns about Trump's commitment to the F-35 early in his presidency, by July 2019, he was more than happy to support the workers building the F-35.

"From here in Milwaukee, you are supporting magnificent aircraft, and soon you'll support the unstoppable, stealth F-35 Lightning II," said President Trump in a July 2019 visit to Derco, a Lockheed company providing parts warehousing and distribution sustainment for the aircraft.

As for the industrial stock, Wall Street is bullish. Ten of the 24 analysts following LMT that are tracked by S&P Global Market Intelligence say it's a Buy or Strong Buy. Of the remaining analysts, 13 call it a Hold and one has it at Sell. This works out to a consensus Buy recommendation.

Argus Research analyst Kristina Ruggeri is one of those with a Buy rating on Lockheed Martin.

"The company has consistently delivered positive surprises to the Street in recent years, regardless of whether defense expenditure is rising or falling or a Republican or a Democrat occupies the White House," Ruggeri says. "We have a favorable view of the company's focus on international revenue diversification (now more than 25% of sales), and expect ongoing geopolitical tensions to benefit sales and earnings going forward."

Exxon Mobil

• Market value: $489.9 billion
• Sector: Energy
• Industry: Oil & Gas Integrated
• One-year total return: 18.9%
• Three-year total return (annualized): 19.8%
• Five-year total return (annualized): 16.0%

It's unlikely Trump will tap current Exxon Mobil (XOM) CEO Darren Woods as Secretary of State. Woods succeeded Rex Tillerson as CEO of the energy giant on January 1, 2017, after the re-elected president nominated Tillerson as his first chief foreign affairs adviser.

Trump has always been an anti-regulation candidate, so the oil and gas industry will likely do well with his victory.

After all, in an August 2 commentary in Barron's, financial journalist Patti Domm noted that the Energy Select Sector SPDR Fund (XLE) had doubled since the Biden administration took office in January 2021. Domm argued that energy stocks would do well under either candidate.

XOM stock is up roughly 4% for the year to date on a total return (price change plus dividends) basis, though its year-over-year gain stands at 19%, below the S&P 500's 27% return.

UBS Global Research analyst Josh Silverstein (Buy) sees even more upside for the shares in the coming months, as evidenced by his $149 price target. This sits more than 33% above Exxon Mobil's January 21 close.

There are "multiple positive drivers across XOM's business over the next five years – visible Upstream growth, new Downstream capacity additions, ramping Low Carbon investments, and cost reductions," Silverstein said in a recent note, adding that Exxon Mobil remains one of the best stocks to buy in the energy sector over the next half-decade or so.

Nucor

• Market value: $29.4 billion
• Sector: Basic materials
• Industry: Steel
• One-year total return: -23.9%
• Three-year total return (annualized): 12.0%
• Five-year total return (annualized): 21.4%

Nucor (NUE) and its steel industry peers could use some good news. HRC (hot-rolled coil) steel was trading near $2,000 an ounce in August 2021. The front-month futures contract was more recently seen near $690.

In addition to lower prices, U.S. steelmakers are experiencing slower sales volumes, squeezing profits. In Nucor's case, revenue for the three months ended September 28 was $7.4 billion, 15% lower than in the same period a year ago. And net earnings per share were $1.05, 77% lower than the third quarter of 2023.

CEO Leon Topalian, who noted in June that market conditions had "softened compared to recent record-setting years," said in Nucor's third-quarter earnings release that the company's "market leadership, product diversity, and strong balance sheet" will allow it "to provide meaningful returns to shareholders and execute our growth strategy even in the face of market uncertainty."

And the tide could turn for NUE with Trump's victory. Indeed, American steelmakers could benefit from Trump tariffs all imported products as it could offset the impact of price competition from Chinese and Brazilian steelmakers.

The materials stock could certainly use a boost, considering its share price was down roughly 25% for the year through January 21. But Argus Research analyst Alexandra Yates says this weakness presents a buying opportunity for investors.

"We view Nucor as a well-run company with a strong track record in its industry," Yates says. "The company is poised to take advantage of megatrends such as the rebuilding of U.S. infrastructure, the transition to alternative energy sources, and manufacturing onshoring."

The analyst concedes the company's financials have been hurt by lower demand and inflationary pressures but adds that "the balance sheet is clean and management has experience navigating difficult conditions."

GEO Group

• Market value: $4.9 billion
• Sector: Industrials
• Industry: Security & Protection Services
• One-year total return: 219.0%
• Three-year total return (annualized): 69.0%
• Five-year total return (annualized): 20.7%

GEO Group (GEO) is the smallest of the five stocks to buy for a Trump presidency. The company designs and delivers support services for prisons, immigration processing centers and community reentry centers.

Founded in 1984, Geo Group is best known for its ICE (Immigration and Customs Enforcement) processing centers and USMS (U.S. Marshals Service) detention centers.

The company has shown steady growth on the financial charts. In its third-quarter results, Geo Group said revenue was up to $603.1 million from $602.8 million a year ago, while adjusted net income was up 23.3% to $29.1 million compared to the third quarter of 2023.

On the price charts, GEO has been much more exciting. Indeed, the mid-cap stock spiked on the announcement that Trump intends to nominate immigration hardliner Tom Homan as his "border czar" and has now more than tripled on year-over-year basis.

Wedbush analysts have an Outperform (Buy) rating on GEO stock and recently raised their price target to $46 on "potential growth prospects of the ISAP electronic monitoring program, which GEO is currently the sole provider for."

Additionally, much of the rhetoric coming from the Trump team "seems to point towards a desire for a significant expansion of ICE operations, which could include a notable increase in bed capacity and electronic monitoring capabilities." And this could create tailwinds for GEO, which is one of the biggest suppliers of beds to ICE.

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