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The 10 Biggest S&P 500 Stock Gainers Since Election Day
Stock traders on the floor of the New York Stock Exchange.
Miguel M. Santiago | Getty Images News | fake images
Many large American companies have seen their stocks rise since the presidential election.
The 10 stocks with the best performance in the S&P 500 Index posted returns of 18% or more since Election Day, according to data provided by S&P Global Market Intelligence, which analyzed returns based on closing prices from Nov. 5 to Nov. 20.
Two companies: Axon Enterprise (AXON), which provides police technology, and Tesla (TSLA), the electric vehicle maker led by Elon Musk, an adviser to President-elect Donald Trump, saw its shares gain more than 35%, according to S&P Global Market Intelligence.
By contrast, the S&P 500 gained about 2% over the same period.
“It’s usually a bad idea” to buy with short-term gains
Investors should be careful about buying individual stocks based on short-term momentum, said Jeremy Goldberg, certified financial planner, portfolio manager and research analyst at Professional Advisory Services, Inc., who ranked No. 37 on the annual Financial Advisor list. CNBC 100.
“It’s usually a bad idea,” Goldberg said. “Momentum is a powerful force in the market, but relying solely on short-term price movements as an investment strategy is risky.”
Investors need to understand what is driving the move and whether the factors driving up the stock price are sustainable, Goldberg said.
Why did these stocks outperform?
The elevated stock returns were due in part to the Trump administration’s policy stances that are expected to benefit certain companies and industries, investment experts said.
Deregulation and a softer view toward mergers and acquisitions are two “key” themes driving bullish sentiment after Trump’s victory, said Jacob Manoukian, head of U.S. investment strategy at JP Morgan Private Bank.
Relying solely on short-term price movements as an investment strategy is risky.
Jeremy Goldberg
portfolio manager and research analyst at Professional Advisory Services, Inc.
Additionally, U.S. regulators will likely be much less strict in allowing potential mergers during Trump’s second term, experts said.
Companies in the streaming ecosystem, such as Warner Bros. Discovery (DMB), owner of the streaming service Max, and owner of Disney+, The Walt Disney Co. (DIS), they said.
Optimistic Earnings and AI
For some stocks, the outperformance was tied to upbeat quarterly earnings results or the forecasts some companies reported around or after Election Day, experts said.
Many of these companies cited artificial intelligence as a growth driver.
For example, Palantir Technologies (PLT), cited “unprecedented” demand for its AI platform in the third quarter, which helped drive “exceptionally strong” earnings, Treasurer and Chief Financial Officer David Glazer told investors Nov. 4.
Similarly, Axon beat analyst estimates in its Nov. 7 earnings results, with officials touting its “AI era plan” and raising earnings forecasts, Goldberg said.
Shares of Axon and Palantir rose 38% and 22%, respectively, from Nov. 5 to Nov. 20, according to S&P Global Market Intelligence.
Some companies benefited from a combination of policies and profits, experts said.
Rows of servers fill Data Hall B at the Facebook Data Center in Fort Worth, Texas.
Paul Moseley/Fort Worth Star-Telegram/Tribune News Service via Getty Images
Take Vistra Corp. (VST), an energy provider, for example. The company’s shares rose 27% after Election Day.
Vistra is in talks with large data centers, or “hyperscalers,” in Texas, Pennsylvania and Ohio to build or upgrade nuclear and gas plants, Stacey Doré, Vistra’s chief strategy and sustainability officer, said on the company’s earnings call. company’s third quarter on November 7.
Tech companies are building more and more such data centers to power the AI revolution, and they need to source increasing amounts of power to run them.
Elon Musk’s ‘cousin’
And then there’s the Elon Musk factor.
Tesla stock got an “Elon Musk premium” from Trump’s victory, said Goldberg of Professional Advisory Services.
Musk, the CEO of Tesla, was a major supporter of Trump’s campaign. Trump tapped him to co-lead a new Department of Government Efficiency. Shares of the electric vehicle maker soared 14% the day after the election and nearly 30% by the end of the week.
President-elect Donald Trump and Elon Musk speak from the ring during the UFC 309 event at Madison Square Garden on November 16, 2024 in New York.
Chris Unger | UFC | fake images
But Tesla stock has additional tailwinds, experts said.
On the one hand, Trump wants to end a $7,500 federal tax credit for electric vehicles. Eliminating that policy is expected to hurt Tesla’s electric vehicle rivals.
Tesla has also been developing technology for driverless vehicles. On Tesla’s recent earnings call, Musk said he would use his influence in the Trump administration to establish a “federal approval process for autonomous vehicles.”
