Investing

Play the "Trump Bump" With These 3 Stocks

Chris MacDonald

Published: January 20, 2025 11:27 am

Inauguration Day is now upon us, and with a new administration taking hold, investors are placing their bets on where they see the overall market (and specific stocks and sectors) headed over the next four years. Indeed, we’ve already seen a great deal of volatility since the election results, but we could be in for some continued volatility ahead as the market continues to price in various Trump-related risks and catalysts into specific stocks.

For those looking for top “Trump bump” stocks to consider adding as we head into his second term, there are certainly plenty of options to choose from in sectors most investors are well-aware Trump will likely be favorable toward. However, these three companies are among the top Trump-related names I’m watching right now, and are among the top ways many investors are playing a new Trump administration, at least thus far.

Key Points About This Article:

• It’s Inauguration Day, which means it’s going to be a day investors think about which stocks to own over the next four years, given this key political shift.
• Here are three stocks that could benefit from a “Trump bump” over the next four years.
• 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.

Occidental Petroleum (OXY)

One of the top sectors most investors expect to see some sort of bump as a result of the Trump inauguration on the horizon is the oil and gas sector. One of Trump’s catchy campaign mottos – “drill baby, drill” – provides a rather simple-to-understand strategic direction the incoming Trump administration will pursue with its regulatory policies around this sector.

Among the key winners I think is worth considering in this space is Occidental Petroleum (NYSE:OXY). Despite the company underperforming in 2024 (losing nearly 20% of its value over the course of the year), there are reasons to consider this stock at these lower share prices.

Now, I think it’s worth noting that oil price volatility had something to do with the company’s mixed performance throughout the year. However, I think the company’s rather rapid debt reduction (achieving 90% of its $4.5 billion goal within three months) positions the stock well from a fundamentals standpoint. In other words, for investors who view the company’s balance sheet as the key issue for this company moving forward, it’s clear that Occidental’s management team is moving in the right direction. 

Occidental Petroleum continues to project confidence in repaying 2025 debt and reducing further obligations, even with low oil prices. CrownRock’s Permian Basin assets have already boosted production and cash flow, while growth prospects in its low-carbon ventures and OxyChem division strengthen its position as a value stock for 2025.

Occidental’s focus on Permian resources continued to yield strong results, with Q4 2024 production projected at 1,430-1,470 Mboe/d. Permian output, boosted by CrownRock assets in the Midland Basin, was revised upward by 12,000 barrels daily, including 9,000 barrels from CrownRock. Given Trump’s “drill baby, drill” narrative, this is a stock that could be poised to win, even it oil prices do decline over the course of the next four years. 

Tesla (TSLA)

Tesla (NASDAQ:TSLA) is perhaps the most obvious pick on this Trump bump list. And one could argue that Tesla perhaps shouldn’t be on this list, considering how high shares have surged following the Trump election win in November. 

I’d reckon that Tesla bulls will continue to buy Tesla stock and use last year’s catalysts as rationale for buying activity moving forward. Indeed, Tesla is one of those companies that’s found a way to create new catalysts and continued excitement around its stock.

Thus, despite the Tesla stock dropping to start the year after reporting 495,570 Q4 deliveries (missing estimates by 10,000 units), investors continued to key in on relatively strong China sales and upcoming catalyst such as the launch of a sub-$30,000 Model Q and a more bullish regulatory environment for the company’s FSD rollout. 

The company plans to launch an autonomous ride-sharing service in California and Texas in 2025, which CEO Elon Musk believes could boost gross margins to 70%, far above the current 20%. Wall Street projects a 26% rise in adjusted earnings over the next year, despite Tesla’s high valuation of 164 times adjusted earnings. While some hedge funds may have sold Tesla post-election, Wedbush analyst Dan Ives called it the most undervalued AI stock, suggesting long-term potential for investors confident in its disruption of mobility and transportation.

I think this stock will continue to be the top “Trump bump” candidate. So, for those looking to ride some tailwinds in Q1, this is a stock that’s certainly worth following right now.

JPMorgan Chase (JPM)

JPMorgan Chase (NYSE:JPM) is the largest bank in the U.S. and a leading global bank with $4.21 trillion in assets and $345.8 billion in equity as of Q4 2024. The company operates in more than 60 countries and is widely considered to be a great way to play overall U.S. economic growth.

So, for investors who believe that economic predictions for how the U.S. economy will perform under a Trump presidency should improve, this is a top way to play this trend. Additionally, Trump has pushed for lower interest rates in the past, and a further steepening of the yield curve could drive more investor interest toward mega banks like JPMorgan moving forward.

JPMorgan outperformed estimates in all four quarter this past year, posting strong revenue and profit growth driven by asset management and investment banking. I think the market will continue to pay attention to CEO Jamie Dimon’s succession plans, fiscal projections, and economic expectations under President-elect Trump’s second term. Shares of JPM stock may be somewhat more volatile than it’s been in the past as the market attempts to decipher how this upcoming Trump presidency should affect this stock. But over the long-term, JPMorgan has proven itself a buy-and-hold winner for most investor portfolios.