What’s the best ‘Magnificent Seven’ stock to buy if Trump wins in November?

Only once in US history has a former president who lost re-election after his first term managed to become president again. The last time this happened was in 1892, when Grover Cleveland became the first – and so far only – president to be elected to two non-consecutive terms.

But Cleveland may soon have company. Former President Donald Trump is running neck-and-neck with Vice President Kamala Harris in the 2024 presidential race. If elected, his policies could impact the companies of the so-called ‘Beautiful sevencompanies: Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Metaplatforms (NASDAQ: META), Microsoft (NASDAQ: MSFT), Nvidia (NASDAQ: NVDA)And Tesla (NASDAQ: TSLA). What’s the best Magnificent Seven stock to buy if Trump wins in November?

Trump’s proposals that could affect the Magnificent Seven

Three major Trump proposals could have the biggest impact on the Magnificent Seven. The Republican presidential candidate’s proposed corporate tax cuts may be at the top of the list.

During his first term, Trump signed legislation that overhauled the federal corporate tax rate structure. Previously, large corporations paid federal taxes ranging from 15% to 35%. After Trump’s tax cuts, these companies paid a flat tax of 21%. The former president wants to reduce this percentage to 15% if he is re-elected.

Another important part of Trump’s economic policy for a possible second term is the implementation of these policies across the board rates. He promises to impose tariffs of up to 20% on all imported products. Trump, who calls himself “Tariff Man,” wants to impose 60% tariffs on goods imported from China. He has also threatened to impose 100% tariffs on products made in Mexico.

When Trump was president, he was in favor of deregulation. Cutting federal regulations will likely be a key focus again when he returns to the White House. Trump wants to abolish ten existing rules for every new regulation. One promise that is especially relevant to the Magnificent Seven is its promise to revoke an executive order signed by President Biden regulating artificial intelligence (AI).

How the Magnificent Seven could be affected

Paying less in federal taxes should be good for all the Magnificent Seven. However, the impact of Trump’s proposed corporate tax cuts may not be as great as it seems. As the following table shows, none of these giant corporations pay the current 21% federal tax rate.

Data sources: Company 10-K filings. *Tesla received more tax benefits in 2023 than it paid in taxes.

Tougher tariffs could especially impact the Magnificent Seven companies that rely on imported products and components. Although companies would likely pass on the higher costs to consumers, the higher prices could negatively impact sales.

Apple would likely be hit hardest by tariffs because of its global supply chain. Everyone else could also feel the impact of higher rates. The Magnificent Seven members that generate more revenue from services, especially Alphabet and Meta, would likely be least affected by Trump’s proposed tariffs.

What about Trump’s deregulation focus? I think the major cloud service providers – Amazon, Microsoft and Alphabet – could be helped by reduced AI regulation. This also applies to Nvidia and, perhaps to a lesser extent, Meta and Tesla.

However, Trump has specifically criticized Alphabet, telling Fox Business host Maria Bartiromo in a recent interview: “Google has been very bad. They have been very irresponsible. And I feel like Google is about to be shut down because I don’t think Congress will accept it.” The former president also called Meta’s Facebook “a true enemy of the people” in a social media post.

And while Tesla CEO Elon Musk is supporting Trump for president, Trump’s proposed policies could hurt Tesla. The Republican presidential candidate has spoken out in the past against federal incentives for electric vehicles. On the other hand, he told an audience at one of his rallies: “I’m for electric cars. I have to be because Elon supported me very strongly.”

The best Magnificent Seven stock to buy if Trump wins

So, what’s the best Magnificent Seven stock to buy if Trump wins in November? I think it’s an exciting battle between Microsoft and Nvidia.

Microsoft could be helped more by Trump’s proposed corporate tax cuts because it pays the highest effective tax rate among the Magnificent Seven companies. Both Microsoft and Nvidia could be hurt to some extent by the former president’s tariffs, but helped by his regulatory stance. Neither has been singled out for attacks by Trump like Alphabet and Meta, and the industries they serve have not been the target of his ire like Tesla.

However, I believe Nvidia has stronger growth prospects than Microsoft. If I had to pick just one Magnificent Seven stock to buy when Trump returns to the White House, I would buy Nvidia.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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. Suzanne Frey, a director at Alphabet, is a member of The Motley Fool’s board of directors. Keith Speights has positions in Alphabet, Amazon, Apple, Meta Platforms and Microsoft. The Motley Fool holds positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls to Microsoft and short January 2026 $405 calls to Microsoft. The Motley Fool has one disclosure policy.

What’s the best ‘Magnificent Seven’ stock to buy if Trump wins in November? was originally published by The Motley Fool