As of July, political analysts are forecasting a red wave in November and Donald Trump’s return to the Oval Office. If you remember, from his first stint as President, Trump implemented several different economic policies. Much of his focus is on returning employment and manufacturing to the United States.
So, as investors, which companies can we target if Trump wins in November? That will depend on which policies Trump and his administration can implement. From the platform he is campaigning on, we know that Trump wants to reduce President Biden’s focus on clean energy and electric vehicles. Let’s look at three stocks to avoid if Trump wins the election in November.
Rivian (RIVN)
Rivian (NASDAQ: RIVN) has often been seen as one of the true challengers to Tesla (NASDAQ:TSLA). One positive for Rivian is that it manufactures its vehicles in America at its factory in Georgia. However, Trump has repeatedly stated that he is pulling EV tax credits and incentives, which will be a major blow to an unprofitable startup like Rivian.
Trump has been notably anti-EV, recently calling it a green scam. Any reduction in EV funding and consumer subsidies would be detrimental to U.S.-based companies like Rivian. Tesla would suffer, too, but Musk’s announcement that he will be donating $45 million per month to Trump’s campaign seemingly has the EV maker in Trump’s good books.
Rivian is far from profitable even after major investments from Amazon (NASDAQ:AMZN) and Volkswagen. Shares of RIVN have gained nearly 60% over the past month but are still down by 18% in 2024. The stock is trading at 3.2x sales and has an Enterprise Value/Revenue (EV/Revenue) of 2.8, which is a fraction of the valuation of Tesla. Still, with Trump’s negative sentiment surrounding EVs, I’d steer clear of Rivian until there is more regulatory clarity.
Enphase (ENPH)
Enphase Energy (NASDAQ:ENPH) is an American solar equipment and infrastructure company. It has been a popular stock among clean energy investors and has provided stellar returns in recent years. Although it was down by about 20% in 2024, it has returned more than 400% over the past five years.
The solar industry faces problems similar to those of EV-makers like Rivian. Trump and Biden have polarizing opinions on clean energy. If Trump is victorious, he will likely reduce government funding for clean energy infrastructure. In the past, he has also imposed tariffs on some of the components and parts of solar equipment made outside the United States.
Repealing Biden’s clean energy bills will be an uphill battle for Trump. He will need the support of both the Senate and the House before anything is significantly changed. Trump has threatened to cancel the Inflation Reduction Act (IRA) and to eliminate the Solar Tax Credit (ITC) for businesses and consumers. Trump’s support of the fossil fuel industry, particularly coal and oil, leaves little room for companies like Enphase to flourish under his watch.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) is one of the most successful companies in history and the seventh largest in the world by market cap. However, Trump’s disdain for Meta and CEO Mark Zuckerberg has been well documented and could again rear its ugly head if he wins the Presidency again.
One of the bullish arguments for Meta is that TikTok’s days as a competitor are numbered in the United States. Trump himself has tried to ban TikTok on multiple occasions. It’s also no secret that Trump is vehemently against China’s government and its documentation of American user data. Recently, Trump has changed his tune on TikTok. He said he favors TikTok staying in America because otherwise, it is just Facebook and Instagram.
Perhaps as a peace offering, Zuckerberg and Meta have reinstated Trump on their platforms. It hasn’t done much to convince Trump or Biden to be a fan of Zuckerberg. Trump has been known to get personal, and being on his hit list as the sitting President might not fare well for Meta. Still, some might argue that Meta is relatively cheap at just 24x forward earnings and 9x sales.
On the date of publication, Michael Que did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.