CIBC highlighted a host of stocks poised to benefit after Democrats swept the midterms . The list, contained in a report out Wednesday, favored major technology platforms, multinational businesses and included some lower-volatility names. The Canadian bank compiled two baskets of potential investment ahead of the election: one with stocks that would benefit under a Democratic-controlled Congress and another designed to benefit from a Republican-controlled Congress. CIBC’s Democratic basket was designed to perform well in a more defensive market, catalyzed by a less business-friendly environment. The bank also preferred multinationals over domestic companies and tilted toward lower-volatility stocks where possible, expecting investors to become more cautious. “In this more regulation-driven scenario, AI picks-and-shovels names are de-emphasized in favor of hyperscalers and software names,” Christopher Harvey, CIBC head of equity and portfolio strategy, wrote. CIBC’s list of 36 beneficiaries under a Democratic-controlled Congress includes big tech stocks names such as Meta Platforms , Apple , Alphabet , Amazon and Microsoft . The basket spans consumer staples, real estate, health care, financials and utilities sectors. Outside of the biggest tech stocks, the list also includes names such as Palo Alto Networks , Accenture , Visa , Cigna Group , Republic Services and NextEra Energy . Texas concern CIBC said Texas is a key concern for the AI trade as Republican Gov. Greg Abbott’s defeat could complicate data-center development. Governor-elect Gina Hinojosa has advocated for a moratorium on new construction and permits . As a result, CIBC warned that AI industrial stocks could underperform near term. “We would expect the kneejerk reaction to be near term underperformance in the AI Industrial names,” the bank said, adding that a construction slowdown could benefit hyperscalers by spreading their capital spending over a longer period. “At the margin, the expected slowdown in data centers could be viewed as a positive for hyperscaler [valuation] multiples,” the bank said in its 6-page note. CIBC also pointed to recent debt sales of $25 billion for Microsoft and $15 billion for Meta as easing pressure on the group. The bank expects most or all scheduled data centers ultimately to be built, due to the construction jobs, economic growth and tax revenue they bring. Some development could shift to states with regulated utilities that backed President Trump in the 2024 election. “Ultimately, we expect most or all of the scheduled data centers to be built. Campaign promises are to be respected but data centers bring certain attractive benefits most politicians desire such as jobs, economic growth, and a larger tax base plus who wants to be blamed for losing the AI race to China,” Harvey wrote. CIBC’s Republican basket favored AI exposure, based on expectations for limited regulation and less resistance to data-center construction under a GOP Senate. That list of 45 names included companies such as Nvidia , Advanced Micro Devices , Broadcom , Vertiv and GE Vernova .
Top stocks to own now after Democrats sweep the midterms, according to CIBC
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- Accenture PLC
- Advanced Micro Devices Inc
- Alphabet Class A
- Amazon.com Inc
- Apple Inc
- Broadcom Inc
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- Canadian Imperial Bank of Commerce
- Cigna Group
- GE Vernova Inc
- Global X Data Center & Digital Infrastructure ETF
- Government and politics
- Greg Abbott
- Invesco QQQ Trust
- Investment strategy
- iShares Expanded Tech-Software Sector ETF
- iShares Semiconductor ETF
- Meta Platforms Inc
- Microsoft Corp
- Nextera Energy Inc
- NVIDIA Corp
- Palo Alto Networks Inc
- Republic Services Inc
- Stock markets
- Technology Select Sector SPDR Fund
- texas
- Vertiv Holdings Co
- Visa Inc
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