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Donald Trump’s presidency hasn’t driven the American stock market higher. In fact, the S&P 500 is down around 9% since the America-first president took office. This pullback is arguably based on legitimate concerns about the impact of tariffs, a slowing US economy, and a threat to American supremacy in artificial intelligence (AI).
And this pullback has impacted some stocks more than others, notably those valued strongly on forward growth expectations, such as technology and innovation-driven sectors. Companies like Tesla, which soared in the wake of Trump’s election, have been particularly hard hit by waning optimism and market volatility.
However, if the market stabilises and enters a new bull run, these same stocks could experience a resurgence. Historically, growth stocks tend to outperform during periods of economic recovery and bullish sentiment.
Investors may look to sectors like AI, renewable energy, and biotechnology, which are poised for long-term growth despite recent setbacks. Additionally, smaller U.S. companies, which could benefit from Trump’s America First policies, may also see significant gains if the market rebounds.
Stocks in my rally watchlist
As with any pullback, I’ve put together a list of companies that I’ve always been interested in and believe may have been unfairly sold off. Let’s have a look at some of the companies on that list.
| 1 month stock performance | Forward P/E | Forward PEG | |
| Alphabet | -11.5% | 18.2 | 1.1 |
| AppLovin | -39.9% | 38.9 | 0.9 |
| Celestica | -30% | 18 | 0.6 |
| Marvel | -37% | 24.8 | 0.5 |
| Vertiv | -17% | 24.4 | 0.9 |
| Uber (NYSE:UBER) | -10% | 22 | 0.6 |
So, why have I chosen these stocks? Well, one connecting factor is the price-to-earnings-to-growth (PEG) ratio. Popularised by fund manager Peter Lynch, the ratio typically suggests a stock is undervalued if the ratio is below one. However, in the current environment, it can be more useful to compared a stock’s PEG ratio to the sector average. And that’s what links these stocks. They’re all considerably cheaper than their peers.
A closer look at Uber
Uber Technologies stock has dipped 10% over the past month. This pullback comes despite cheaper forward valuations, improved profit margins, and a healthier balance sheet. However, these are factors that could help the company outperform in a bull market.
A key driver of Uber’s potential growth is its partnership with Waymo. The partnership with the Alphabet company has seen the rollout of robotaxi services in Austin, Texas, since early March. This move, combined with its expanding technical capabilities and vehicle supply, strengthens its ecosystem. Additionally, Uber’s diversified revenue streams, including Mobility, Delivery, and Freight segments, provide a robust foundation for sustained growth.
However, risks remain. The company’s heavy reliance on autonomous technology investments could face regulatory hurdles or technological setbacks. Market sentiment also plays a crucial role, and while Uber’s fundamentals are strong, the timing of a market bottom remains uncertain.
For me, it’s a stock that I’m watching incredibly closely. It’s very cheap based on projections, but I appreciate that autonomous driving offers both massive opportunities and risks. I’m considering adding it to my portfolio based on the current forecasts.
