It’s official. Joseph Robinette Biden Jr. has been sworn in as the 46th President of the United States. Now that it’s official, it’s time to seriously consider the investment implications of a Biden Presidency, including which stocks to buy now.
Economically speaking, it will look a lot different than a Trump presidency. Not just because Trump and Biden’s economic agendas are night and day, but also because Democrats and Republicans have different economic priorities.
With Democrats now in control of both Chambers of Congress, the next four years have the potential to look a lot different than the past four years…
The stocks that outperformed during the past four years may not necessarily be the stocks that outperform over the next four years.
Meaning it’s time to shift your investment mindset (if you haven’t already).
The shift in power in Washington D.C. will lead to a shift in economic priorities in the U.S., which will lead to a shift in the stocks that are winning big on Wall Street.
Forget yesterday’s winners. It’s time to focus on finding tomorrow’s winners.
Which stocks should you be focusing on?
For starters, clean energy stocks. One of Biden’s biggest priorities – and indeed one of the Democratic party’s biggest priorities – is combatting climate change. In just his first few days in office, Biden has already moved to rejoin the Paris climate agreement and signed a flurry of executive orders aimed at creating a “greener” society.
That, of course, is bullish for solar stocks and hydrogen stocks, since solar and hydrogen are two of the world’s largest, most important, and most useful clean energy sources.
In the solar world, some of my favorite picks include:
- Maxeon Solar (NASDAQ:MAXN) for its high-quality solar panel technology.
- SunPower (NASDAQ:SPWR) for its leadership in the premium solar category.
- SolarEdge (NASDAQ:SEDG) for its dominance in the solar optimizer and inverter market.
- JinkoSolar (NYSE:JKS) for its compelling turnaround story and cost-leading manufacturing capability.
Meanwhile, in the hydrogen world, I like:
- Plug Power (NASDAQ:PLUG) as the technology leader of the global Hydrogen Economy.
- Ballard Power (NASDAQ:BLDP) for its leadership in supplying hydrogen fuel cells to the transport market.
- Bloom Energy (NYSE:BE) for its cool new hydrogen-powered energy boxes that could help consumers go “off the grid.”
- Fusion Fuel (NASDAQ:HTOO) thanks to its breakthrough, hyper-efficient green hydrogen production process.
As a byproduct of Biden’s focus on combatting climate change, electric vehicle stocks should also be big winners over the next few years. EV subsidies likely won’t be phased out anytime soon under Biden. They may even go up. Either way, the legal stage is set for explosive growth in the EV sector over the next four years.
In the EV space, some of my favorite picks include:
- Tesla (NASDAQ:TSLA) because the company dominates the industry on branding and battery technology.
- Nio (NASDAQ:NIO) because it is the “Tesla of China” and one of the very few EV companies that can rival Tesla’s battery tech.
- Arrival (NASDAQ:CIIC) since this is the highest quality player in the short-distance commercial EV market.
- Blink Charging (NASDAQ:BLNK), ChargePoint (NYSE:SBE), and EVBox (NYSE:TPGY) as plays on rapidly expanding EV charging infrastructure.
- ElectraMeccanica (NASDAQ:SOLO) and Arcimoto (NASDAQ:FUV) as unique plays on the emerging small, three-wheel EV megatrend.
- Canoo (NASDAQ:GOEV) for its proprietary modular skateboard platform upon which multiple self-driving cars of the future will be built.
- Fisker (NYSE:FSR) because its affordable yet sleek looking Ocean eSUV is going to be a huge hit.
- Romeo Power (CVE:RMO) because this is the smartest, most innovative battery tech company in the industry today.
- XL Fleet (CVE:XL) for its plug-and-play fleet electrification services.
Moving beyond the clean energy space, cannabis and mushroom stocks should outperform meaningfully in the early 2020s.
That’s because Biden has said he will federally decriminalize marijuana, which paves the path for the Democratic-controlled House of Representatives and Congress to pass legislation which nationally legalizes weed (much as Canada has already done and what Mexico is currently doing).
At the same time, progress on legalizing weed will open more doors for the potential legalization of psychedelic-inspired medicines for the treatment of mental health disorders, like ADHD, depression, anxiety, and PTSD.
On those fronts, some names I’m particularly bullish on include:
- Canopy Growth (NASDAQ:CGC) because its enormous cash reserves give it unrivaled firepower to invest in the U.S. cannabis market once weed is fully legal.
- GrowGeneration (NASDAQ:GRWG) since the hydroponics retail chain operator has an opportunity to turn into the “Home Depot for Marijuana.”
- WM Holdings (NASDAQ:SSPK) because its Weedmaps digital listings platform is already cemented as the “Google of Marijuana.”
- Compass Pathways (NASDAQ:CMPS) since this is the leader of the Shroom Boom, with an uber talented management team and a proprietary psilocybin formulation dubbed COMP360 that is Phase-2 clinical trials.
- MindMed (OTCMKTS:MMEDF) as a micro-cap play on the Shroom Boom, with more risk but higher upside potential than COMPASS Pathways.
On a more near-term basis, Biden’s presidency should provide a boost for e-commerce stocks. The thinking here is that massive stimulus is coming. That stimulus will likely include $1,000-plus checks for qualifying Americans. Many Americans will spend those checks on retail items – as was the case with the last round of checks.
That will provide a boost for all retail stocks.
But, even one step further, Biden will likely continue to urge caution on the Covid-19 pandemic front, and therefore, physical retail shops in most big urban areas are likely to remain closed for longer. Thus, this rush of spending will happen predominately in the online channel.
In the e-commerce space, some of my top stock picks are:
- Stitch Fix (NASDAQ:SFIX) because data-driven, e-retail personalization is the future of clothes shopping.
- LivePerson (NASDAQ:LPSN) because its AI-powered chatbots represent the next evolution of e-commerce.
- Farfetch (NYSE:FTCH) and The RealReal (NASDAQ:REAL) because Gen Z consumers are obsessed with luxury fashion and status, are starting to earn incomes, and also love to shop online.
- Carvana (NYSE:CVNA) and Vroom (NASDAQ:VRM) because the auto shopping experience is getting virtualized.
- Chewy (NYSE:CHWY) since we love our pets, and we love to shop online.
- Wayfair (NYSE:W) and Overstock.com (NASDAQ:OSTK) because augmented reality technology and lightning-fast delivery times are making online furniture shopping more viable than ever before.
So… with all that said… you now have a watchlist of 34 stocks that could do well under President Biden.
Are they all going to be huge winners? Probably not. But a portfolio of these stocks will likely do very well between now and 2024.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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