In four weeks, on November 5, voters will determine the direction our great country will take over the next four years.
While not every bill coming out of Washington DC will impact the stock market, the economic proposals ultimately introduced by the incoming president and Congress will help shape the landscape for corporate America in the years to come.
Current Vice President and Democratic Party presidential candidate Kamala Harris has proposed sweeping changes to lower food and drug costs, expand a range of tax breaks for middle-class families, and wants to reduce the federal budget deficit by increase in the corporate tax rate by 33%.
While some companies would likely thrive with Harris in the White House, other high-flying companies may struggle.
What follows are three of Wall Street’s most influential stocks that could plummet if Kamala Harris wins in November.
Metaplatforms
The first highly influential company that would struggle if Harris were to win in November is social media giant Metaplatforms (NASDAQ: META)the parent company of Facebook, Instagram and WhatsApp, among others.
Meta is at the top of the pedestal when it comes to social media websites. For the quarter ended June, it attracted 3.27 billion daily active users across its family apps. No other social platform comes close to generating this level of daily visits, which more often than not provides Meta with exceptional ad pricing.
The concern for Meta is the potential for Harris and her administration to pursue monopoly-style businesses. In an interview with CNN while running for the Democratic presidential nomination in 2019, Harris suggested that she wanted to “seriously look” at breaking up the company, and alluded that Meta (formerly known as Facebook) is “essentially a utility company it had become unregulated.”
Granted, the political views of elected officials can and will change over time. It is not clear whether Harris still believes that Mark Zuckerberg’s company needs stricter regulations to protect consumers’ privacy interests. Nevertheless, her 2019 comments point to the very real possibility of pitting the Harris administration against some of Wall Street’s most dominant firms.
The other reason why Meta Platforms could struggle if Harris wins in November is her aforementioned plan to increase the corporate tax rate by a third – from 21% to 28%. While Meta is quite profitable from its advertising business, a higher tax rate would expose the mounting losses it is facing in the Reality Labs segment. This is the operating division that focuses, among other things, on augmented/virtual reality devices and the company’s reverse ambitions.
While a higher corporate tax rate has historically been positive for the benchmark S&P500this may not be the case for metaplatforms.
Novo Nordisk
A second market-leading company that could face a tough time if Kamala Harris wins in four weeks is the Denmark-based pharmaceutical company Novo Nordisk (NYSE: NVO).
Novo Nordisk found its way into the spotlight thanks to its blockbuster duo of injectable glucagon-like peptide-1 (GLP-1) drugs, Ozempic and Wegovy. Ozempic is approved as a treatment for type 2 diabetes and long-term treatment for weight management, while Wegovy is a weight management therapy for patients with at least one weight-related condition, such as type 2 diabetes, high cholesterol or high blood pressure. GLP-1 drugs are the first breakthrough in prescription weight loss in quite some time.
However, Harris has made reducing prescription drug costs a key issue of her campaign. While the Joe Biden administration and Kamala Harris praised this Eli Lilly for cutting the cost of the GLP-1 drug Zepbound in August, other GLP-1 drug makers are being called on to follow suit.
Novo Nordisk seems reluctant to heed that call. The company’s CEO, Lars Jorgensen, defended his company’s position before a U.S. Senate committee in September by charging $1,349 (retail) for a 28-day supply of Wegovy and $968 (retail) for a 28-day supply of Ozempic to dawn. Novo Nordisk is heavily dependent on Ozempic to drive future earnings growth. Not to mention that Wall Street is counting on Ozempic to support the company’s outsized earnings figure: 27 times full-year earnings.
The uncertainty surrounding domestic drug pricing and what Harris could accomplish in the Oval Office could be enough to halt what has been nothing short of a parabolic rise for Novo Nordisk over the past three years.
Apple
The third highly influential stock that could plummet if Kamala Harris wins in November is none other than Wall Street’s largest publicly traded company by market cap. Apple (NASDAQ: AAPL). Interestingly enough, this is a company that could also struggle if Donald Trump wins.
Apple is best known as a dominant force in tech products, such as the iPhone, iPad and Mac. But the lion’s share of the company’s growth currently comes from the services segment. CEO Tim Cook is overseeing a multi-year transformation that emphasizes the importance of subscription services. A subscription-based model should ideally improve the company’s operating margin over time and smooth out the revenue declines that often occur during iPhone upgrade cycles.
But Apple could suffer a double whammy if Harris were to win and be able to implement the full scope of her economic proposals.
For starters, a 33% increase in corporate taxes would potentially leave Apple with less capital to buy back shares. No publicly traded company has benefited more directly from stock buybacks than Apple.
Since the beginning of 2013, Apple has repurchased $700.6 billion in common stock, helping to boost earnings per share (EPS) from what would be less than $4 in fiscal 2024 (ending September 30, 2024) if it had done so. has never repurchased its shares, down to a consensus estimate of $6.68 per share in the current fiscal year. Without significant buybacks, Apple’s stalled growth engine would be exposed.
Additionally, Kamala Harris has proposed taxing unrealized capital gains. Although this tax is strictly aimed at individuals with net worth of more than $100 million, many of the wealthiest taxpayers will likely have a stake, directly or through a publicly traded fund, in Wall Street’s largest company by market capitalization.
Whether it’s Donald Trump’s proposed 60% tariff on imports from China or Harris’ plan to raise taxes on the ultra-wealthy and corporations, there is a real possibility that Apple will come out on top on November 5.
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Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, is a member of The Motley Fool’s board of directors. Sean Williams has positions in metaplatforms. The Motley Fool holds and recommends positions in Apple and Meta Platforms. The Motley Fool recommends Novo Nordisk. The Motley Fool has one disclosure policy.
Prediction: Three of Wall Street’s most influential stocks could plummet if Kamala Harris wins in November was originally published by The Motley Fool
