The U.S. Constitution doesn’t give many powers to vice presidents (VPs). How much a VP gets to do depends heavily on what assignments the president gives them. That has been the case for Vice President Kamala Harris.
Now, though, Harris has her sights set on the top spot. Based on the latest polls, she has a decent chance of winning. A victory in November would set the stage for her to push for policy changes that could especially benefit some businesses. Here are three stocks that could be huge winners if Harris becomes president.
1. Broadcom
Broadcom (NASDAQ: AVGO) is a California-based company that markets semiconductors and infrastructure software solutions. Its products are used in data centers, factories, smartphones, telecommunications equipment, and more.
Artificial intelligence (AI) has provided a massive tailwind for Broadcom in recent years. Its AI networking products and custom AI accelerators have enjoyed surging demand. Seven of the eight largest AI clusters in use worldwide use Broadcom’s networking technology.
Broadcom is a big winner in 2024, with its shares up more than 50%. This momentum could continue if Harris becomes president, in part because of one of her key policy proposals. She wants to invest in “critical industries of the future,” including AI data centers and the semiconductor industry.
But could Harris’ plans to increase corporate tax rates from 21% to 28% hurt Broadcom? Maybe, but I doubt it. In 2023, the company paid U.S. federal taxes of $453 million — only 1.3% of its total net revenue.
2. D.R. Horton
D.R. Horton (NYSE: DHI) has ranked as the largest homebuilder by volume in the U.S. for more than two decades. The company operates in 121 markets across 33 states. It closed on 94,255 homes during the 12 months ending June 30, 2024.
The Federal Reserve’s recent decision to lower interest rates is great news for D.R. Horton. Lower interest rates usually lead to lower mortgage rates, and when mortgage rates fall, more people enter the market to buy a house.
The Fed wouldn’t have cut interest rates if it didn’t think inflation was moderating sufficiently. A survey of leading economists by the Financial Times and the University of Chicago found that 70% viewed Harris’ economic policies as better for controlling inflation than the policies of Donald Trump. Goldman Sachs‘ economists also agreed that her economic plan would lead to lower inflation than Trump’s. A lower-inflation environment is exactly what D.R. Horton needs to prosper.
However, Harris’ plans to spur the construction of 3 million new homes could be even better for D.R. Horton. She wants to give financial help to first-time homebuyers and provide tax credits to homebuilders who sell to them.
3. MP Materials
MP Materials (NYSE: MP) is based in Nevada and is the largest producer of rare earth materials in the Western Hemisphere. Its Mountain Pass Rare Earth Mine and Processing Facility is the only large-scale rare earth mining and processing site in North America.
MP produces rare earth materials used in electric vehicles, energy-efficient HVAC (heating, ventilation, and air conditioning) systems, industrial robots, smartphones, and wind power generators. They’re also critical for defense systems, including avionics, communications, drones, radar, and sonar.
These uses of MP’s products align well with Harris’ policies. She pledges to protect U.S. electric vehicle makers. The vice president wants to support renewable power so the U.S. isn’t dependent on foreign sources. Harris seeks to increase energy efficiency in homes. And she promises to “ensure that the United States military remains the strongest, most lethal fighting force in the world.”
Arguably, the most important proposal Harris has made regarding MP Materials, though, is to build a national stockpile of critical minerals. Her campaign said in a statement that she wants to provide incentives for “investments that expand U.S. and allied production of these resources.” If Harris becomes president and is successful in achieving these goals, MP Materials would be a big beneficiary.
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Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends D.R. Horton and Goldman Sachs Group. The Motley Fool recommends Broadcom and MP Materials. The Motley Fool has a disclosure policy.
3 Stocks That Could Be Huge Winners If Kamala Harris Becomes President was originally published by The Motley Fool
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