JD Vance has been in full focus since former President Donald Trump named him as his vice presidential pick. The Republican senator from Ohio spent years in the business world before running for office, primarily in the field of venture capitalism. Prior to his foray into politics, he served at multiple firms, including Peter Thiel’s Mithril Capital. Now these tech titan connections are helping him pave his way to an even more powerful career.
Tech Stocks in the Age of JD Vance
According to Fast Company, Vance spent six years in Silicon Valley, working for three different firms. He served as a partner on deals for artificial intelligence (AI) startups such as Pryon and Chassi, and his list expands to include names like food production company AppHarvest. Vance’s background in tech investing has helped him procure the support of some of the industry’s most prominent names, including Thiel, Elon Musk and David Sacks. And helpfully, these business leaders have been backing him for years. As the New York Times reports:
“Before the 2022 midterm elections, Mr. Thiel gave $15 million to support Mr. Vance’s campaign for the Senate. Mr. Sacks donated $1 million to a political action committee backing Mr. Vance’s run. In a post on Truth Social on Monday, Mr. Trump cited Mr. Vance’s ‘very successful business career in Technology and Finance’ as one reason he was chosen as his running mate.”
Perhaps contradictingly, Vance has garnered this support from tech leaders even as he has advocated for breaking up the monopolies held by the sector’s biggest companies. In February 2024, he posted on X “Long overdue, but it’s time to break Google up.” A month later, he described the search leader as “one of the most dangerous companies in the world,” accusing it of “left-wing bias.”
Vance’s pro-regulatory stance may make some investors nervous. After all, breaking up Big Tech companies could negatively impact the underlying stocks. But it is important to note a few key things.
Firstly, it is unlikely that a Republican administration will focus too heavily on antitrust legislation. The GOP tends to favor less regulation for big businesses. Trump certainly did, as evidenced by his Tax Cuts and Job Act (TCJA) of 2017. This legislation resulted in significant tax cuts for corporations. If reelected, Trump would likely redouble his focus on these policies.
In contrast, a Democratic administration is much more likely to prioritize ending corporate monopolies, as we’ve seen from President Joe Biden’s administration. In July 2021, he signed a sweeping executive order that outlined 72 actions aimed at promoting competition within the U.S. economy by limiting the power of corporate monopolies. “Biden made the fight against monopolies central to his economic strategy,” reports The Washington Monthly. “Trump used it to reward his friends and punish his enemies.”
Secondly, business leaders clearly don’t expect major issues from a Trump-Vance ticket. After all, Vance has strong ties to Silicon Valley and has continued to garner endorsements. It seems entrepreneurs and CEOs assume Trump will keep up his pro-business modus operandi in a second term.
The Bottom Line: Look for Small-Cap Opportunity
Lastly, having a VP who is a former Silicon Valley insider will likely push Trump toward more tech-friendly policies. This may lead to opportunities for investors involving smaller-cap artificial intelligence companies that haven’t reached Wall Street’s radar yet as ongoing AI enthusiasm prompts investors to double down on the sector’s emerging names.
On the date of publication, Samuel O’Brient 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.
