Donald Trump’s presidential victory paved the way for a blistering rally in the trading session that followed. Undoubtedly; it seems like 2016 all over again as the Trump rally looks to merge with a hopeful Santa Claus rally going into November. Of course, just because investors are clapping their hands over Trump’s return does not mean investors should buy up any and all stocks that are up by the greatest deal on Wednesday. Indeed, enthusiasm over promises of corporate tax cuts could be faded by new tariffs and the potential return of inflation.
Either way, high-tech innovators like Alphabet (NASDAQ:GOOG) stand out as obvious beneficiaries, not just from Trump tax cuts but the potential for fewer regulations. Though it was the big bank stocks that won the day on Trump’s win, I think the mega-cap tech titans that will stand even taller under Trump’s four years.
Key Points About This Article
- GOOG stock popped after Trump won the election.
- Alphabet is one of the firms that could make America an AI superpower.
- If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.
Why GOOG stock surged on Trump’s win. And why it could soar even higher.
Alphabet is one of the top dogs in artificial intelligence (AI). Though it’s not yet crystal clear as to what Trump’s stance is on AI regulations, I wouldn’t at all be shocked if he were to keep hurdles out of the way of the biggest and best leaders in AI.
After all, there’s a lot on the line when it comes to America’s footing in the AI race. And if America doesn’t go full speed ahead with AI, another nation likely will, running the risk that America’s AI edge would erode. Imposing regulations that could slow the pace of AI innovation and growth just doesn’t seem like a move Trump would make, at least in my view.
Of course, there are downsides to having too little regulation on tech as firms lead the AI revolution. However, the key is about finding the right balance. The right “Goldilocks” level of regulation could put the safety guardrails in place without dampening the technology’s advance. When it comes to Trump, I think they’re in no rush to take the wind out of big tech’s back.
In any case, GOOG stock popped over 4% on Wednesday, a move that may kick off the start of a technical rally to new highs. In a previous piece, I noted a potential technical head-and-shoulders bottom pattern in GOOG stock that I believed was worth getting behind.
After the latest surge, it seems like just a matter of time before the $200 level is hit again. Whether it’s due to Trump policies, solid earnings, or newfound hope for growth projects, however, remains to be seen.
Either way, I do believe the odds are high that GOOG stock will double in the next four years under Trump’s presidency. As I noted in a prior piece, GOOG stock is the technological innovator that has all the tools to beat a “lost decade” for stocks. And in this piece, we’ll look into a few areas that could be made even “growthier” under a Trump administration.
Google’s AI plans may get a jolt under Trump.
Alphabet’s Waymo, the popular autonomous ride-hailing service, has been slowly and steadily driving around customers in Los Angeles and other localities without anyone manning the wheel. Thus far, it’s been a fairly slow rollout that has not been a needle mover for GOOG stock.
Indeed, it’s hard to believe that this is probably the worst that Waymo autonomous vehicles will ever be. As Waymo’s AI tech improves, so will its safety track record. And if Trump does pave the way for AI deregulation, perhaps Waymo will be able to advance faster and roll out to new cities a lot sooner than it would have under another administration.
As long as Waymo has the safety track record to show, I think the autonomous driving project could hit the accelerator under a Trump term. Robotaxis are a massive market and one that I believe Waymo is leading in by quite a margin.
Also, Google’s Gemini large language model (LLM) has steadily improved since its launch. And while Gemini would likely get smarter under any presidency, I do think Trump’s policies could be more conducive to more significant growth.
Most notably, Gemini may be the big engine that powers a wide range of AI-applied services that can help Google score a handsome return on its AI investments. As Google eyes new industries to add value (or should I say disrupt), perhaps Gemini could grow to become the next big money-maker after Google Search.
In any case, I was actually surprised GOOG stock wasn’t up more than 4% on Wednesday’s Trump bump. Even after the single-day surge, GOOG shares look undervalued at 23.65 times trailing price-to-earnings (P/E).
So, can GOOG stock double in the next four years under Trump? I would not rule it out, but its unlikely to grow into a $4 trillion dollar company in the next 4 years.
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