National security has always been one of the core issues that Trump has paid much attention to, which also applies to cybersecurity in the context of the digital environment. His administration has previously paid attention to improving the country’s cybersecurity apparatus meaning that cybersecurity companies and the software companies that support them may find themselves in demand.
The fact that the software industry is global and ever-changing in terms of regulation can be seen as both a threat and an opportunity. Firms that can manage these issues and exploit technology solutions for compliance purposes will probably be more successful than competitors. Also, a potential Trump administration might support domestic technology investments and innovation-enhancing policies that would also benefit the sector.
So with this thesis, in mind, here are three American Software Stocks that investors should keep their eyes on if Trump is reelected.
Oracle (ORCL)
A leading provider of enterprise software, Oracle (NYSE:ORCL) is one of those powerful American software stocks for investors who are placing their money on Trump’s second term in 2024. Being a long-time American-based technology company, Oracle is likely to gain from pro-business policies and emphasis on domestic development under the second Trump administration.
The recent collaboration between Oracle and OpenAI, a leading AI company, demonstrates Oracle’s capacity to seize on new technologies. The cloud infrastructure business of the company is doing quite well with the company signing more than 30 major AI contracts in the last quarter alone. This puts Oracle in the middle of the AI revolution, which is in perfect harmony with the Trump Administration’s focus on American technological dominance.
Also, Oracle’s good free cash flow and sound balance sheet position enable it to have the financial muscle to support investment in growth strategies. Although the valuation of Oracle remains slightly lower than many of its software peers, the company presents a good upside for investors who believe the incoming administration will usher in a business-friendly environment.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) is one of the best American software stocks that an investor can choose if they expect Trump to win the upcoming election. Furthermore, the company remains among the most significant American technology companies; thus, it will react positively to measures that support domestic innovation and industry growth.
Also, Microsoft’s cloud computing service Azure has grown to be a market leader, offering essential services to numerous organizations. Because Trump’s policies are friendly to businesses, this may also increase the need for Azure and the other cloud-related services that Microsoft offers.
Moreover, Trump is famous for his tax cuts. He freed up millions for small and large businesses during his first term, and analysts predict that his second term will also see him do the same. MSFT stock, being a cloud leader with its Azure offering, may benefit from this indirectly, as it allows entrepreneurs to more readily enter the market and use its suite of services due to a lower tax burden. This may also coincide with the predicted fall in interest rates this year.
Intuit (INTU)
Intuit (NASDAQ:INTU) provides a range of financial software and services. However, it remains relevant for its two main products: TurboTax and QuickBooks, which are keys to the US tax and accounting systems for millions of Americans and small businesses. A pro-business Trump administration can also add to the demand for such products, which enable clients to minimize their tax administration costs.
In addition, Intuit’s current investments in advanced technologies such as artificial intelligence are very likely to transform the range of services it offers in the future. The concept of offering AI-incorporated services through TurboTax and QuickBooks is in synergy with the Trump administration’s emphasis on technology supremacy.
INTU could be one of those American software stocks for investors if one is bullish on the rise of small-cap companies in the wake of a Trump presidency since it offers software solutions that remain universal to the segment.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed 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.
Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.