Prediction: 3 of Wall Street’s Most Influential Stocks May Fall If Kamala Harris Wins in November

Four weeks from today, on November 5th, voters will determine what direction our great country will take for the next four years.

While not every bill that comes out of Washington, DC has an impact on the stock market, the economic proposals that are ultimately enacted by the incoming president and Congress will help shape the landscape for corporate America for years to come. .

Kamala Harris delivering remarks. Image Source: Official White House Photo by Adam Schultz.

Current Vice President and Democratic presidential nominee Kamala Harris has proposed sweeping changes to lower food and drug costs, expand a variety of tax credits for middle-class families, and wants to reduce the federal deficit by raising the corporate tax rate by 33 %.

While some companies may thrive with Harris in the White House, other airlines may struggle.

What follows are three of Wall Street’s most influential stocks that may fall if Kamala Harris wins in November.

Meta platforms

The first highly influential business that could be difficult if Harris proves victorious in November is the social media giant. Meta platforms (META -1.87%)the parent company of Facebook, Instagram and WhatsApp, among other social sites.

Meta is at the top of the pedestal when it comes to social media sites. For the quarter ending in June, it attracted 3.27 billion daily active users to its family apps. No other social platform comes close to generating this level of daily visits, which gives Meta exceptional ad pricing power most of the time.

The concern for Meta is the potential for Harris and her administration to seek monopoly-like businesses. In an interview with CNN while running for the 2019 Democratic presidential nomination, Harris suggested he wanted to “take a serious look” at breaking up the company and hinted that Meta (formerly known as Facebook) was “in essentially a utility that disappeared unregulated.”

Of course, the political views of elected officials can change over time. It’s unclear whether Harris still believes Mark Zuckerberg’s company needs stronger regulations to protect consumers’ privacy interests. However, her remarks in 2019 signal the very real possibility of the Harris administration pitting itself against some of Wall Street’s most dominant companies.

The other reason Meta Platforms could struggle if Harris wins in November is her aforementioned plan to raise the corporate tax rate by a third — from 21 percent to 28 percent. Even though Meta is quite profitable from its advertising operations, a higher tax rate would expose the growing losses it faces from its Reality Labs segment. This is the operating division focused on augmented/virtual reality devices and the company’s metaverse ambitions, among other projects.

While a higher corporate tax rate has historically been positive for the benchmark S&P 500this may not be the case for meta platforms.

Image source: Getty Images.

Novo Nordisk

A second market leader that could fight hard if Kamala Harris wins in four weeks is a Danish pharmaceutical company. Novo Nordisk (NGO 2.30%).

Novo Nordisk found its way into the limelight thanks to its successful duo of injectable glucagon-like peptide-1 (GLP-1) drugs, Ozempic and Wegovy. Ozempic is approved as a treatment for type 2 diabetes and for long-term weight control, while Wegovy is a weight control therapy for patients with at least one weight-related condition, such as type 2 diabetes, high cholesterol, or arterial hypertension. GLP-1 drugs are big pharma’s first prescription weight loss breakthrough in some time.

Still, Harris has made lowering prescription drug costs a key theme of his campaign. While the Joe Biden administration and Kamala Harris praised Eli Lilly to drop the cost of the GLP-1 drug Zepbound in August, other GLP-1 drug makers are being asked to follow suit.

Novo Nordisk doesn’t seem keen to heed that call. The company’s CEO, Lars Jorgensen, defended his company’s position before a US Senate committee in September of charging $1,349 (retail) for a 28-day supply of Wegovy and $968 (retail) for a 28-day supply of Ozempic. Novo Nordisk is counting heavily on Ozempic to propel future earnings growth. Not to mention, Wall Street is counting on Ozempic to prop up the company’s wild earnings — 27 times next year’s earnings.

The uncertainty surrounding domestic drug pricing and what Harris might be able to accomplish in the Oval Office could be enough to halt what has been a larger parabolic move for Novo Nordisk over the past three years.

Apple

The third highly influential stock that could fall if Kamala Harris wins in November is none other than Wall Street’s largest publicly traded company by market capitalization. Apple (AAPL -2.25%). Interestingly enough, this is a company that may be in trouble if Donald Trump wins.

Apple is best known for being a dominant force in technology products such as the iPhone, iPad, and Mac. But most of the company’s growth right now is coming 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 valleys that often occur during iPhone upgrade cycles.

But Apple could face a double whammy if Harris wins and is able to implement the full scope of his economic proposals.

For starters, raising the corporate tax rate to 33% would leave Apple with less capital to channel into share buybacks. No public company has benefited more directly from share buybacks than Apple.

Since the start of 2013, Apple has bought back $700.6 billion of its common stock, which has helped boost earnings per share (EPS) from what would be less than $4 in fiscal 2024 ( ended September 30, 2024) if it had never repurchased its shares, at a consensus estimate of $6.68 per share in the current fiscal year. Without meaningful buybacks, Apple’s stalled growth engine would be exposed.

Additionally, Kamala Harris proposed taxing unrealized capital gains. While this tax is strictly focused on individuals with a net worth of more than $100 million, many of the wealthiest taxpayers are likely to own a stake, directly or through an exchange-traded fund, in Wall Street’s largest company Street by market capitalization.

Whether it’s Donald Trump’s proposed 60% tariff on Chinese imports or Harris’ plan to raise taxes on the ultra-rich and corporations, there’s a real possibility that Apple will break even on November 5th.