Election 2024: How a Divided Government Could Impact the Stock Market
The 2024 presidential election is shaping up to be a nail-biter, with Vice President Kamala Harris holding a slim lead over former President Donald Trump in the polls. Meanwhile, Decision Desk HQ’s models predict that Republicans have a good chance of regaining control of the Senate and holding onto their majority in the House of Representatives.
While it’s impossible to predict with certainty how the election will play out, investors can start thinking about how different scenarios might impact the stock market. In this article, we’ll explore three stocks that could be big winners if Kamala Harris wins the presidency but the GOP controls Congress.
Artificial Intelligence: A Bipartisan Priority
One area where Democrats and Republicans agree is on the importance of artificial intelligence (AI). Both parties recognize the need for the US to be a global leader in AI innovation, and companies like Broadcom (NASDAQ: AVGO) are well-positioned to benefit from this trend.
As a top provider of semiconductors and networking infrastructure used in AI data centers, Broadcom could see increased demand for its products under a Harris presidency. Additionally, with the GOP controlling Congress, Harris may not be able to pass her proposed corporate tax increases, which could be a win for Broadcom.
Infrastructure: A Key Area of Agreement
Another area where Democrats and Republicans agree is on the need for improved infrastructure. Companies like Brookfield Infrastructure (NYSE: BIP) (NYSE: BIPC) could benefit from increased investment in pipelines, terminals, rail, and other infrastructure assets.
Brookfield Infrastructure’s business is also remarkably resilient, with 90% of its funds from operations (FFO) contracted or regulated. This could provide a safe haven for investors in the event of economic uncertainty.
Cybersecurity: A Growing Concern
Finally, cybersecurity is an area where both parties agree on the need for increased investment. Companies like Microsoft (NASDAQ: MSFT) are at the forefront of both AI and cybersecurity, and could benefit from increased demand for their products and services.
Microsoft’s extensive AI capabilities and integrated cybersecurity products make it a leader in the field, and its cloud-service offerings provide a strong foundation for growth.
Conclusion
While the outcome of the 2024 presidential election is far from certain, investors can start thinking about how different scenarios might impact the stock market. By focusing on areas like AI, infrastructure, and cybersecurity, investors can identify companies that are well-positioned to succeed regardless of who wins the presidency.
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