 President Trump denied rumors of paring back his levy of 10% to 25% tariffs on all exports and 60% for China, but there 2 stocks will gain... ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ |
| | Written by Jea Yu 
President-elect Donald Trump denied a report from the Washington Post that indicated he was planning to issue universal tariffs on critical imports, implying a pared-down tariff policy. Trump refuted the claims on his Truth Social platform, claiming the report was "fake news." Trump has stated his intent to levy 10% tariffs across the board and up to 60% tariffs for Chinese imports. He has previously stated his intent to levy 25% tariffs on imports from Mexico and Canada on day one. Tariffs are meant to protect the domestic production of U.S. goods. Here are two stocks that will gain from import tariffs. Nucor: Protecting Domestic Steel Production Charlotte, North Carolina-based Nucor Co. (NYSE: NUE) is a major domestic steel producer. Nucor’s stock was down 29% in 2024, severely underperforming the benchmark indices. The leader of the basic materials sector is the largest steel producer in the United States in terms of revenue. Canada and Mexico Are the First and Third-Largest Exporters of Steel to the United States Trump has stated his intent to levy 25% import tariffs on Canada and Mexico on day one of his second term. This would be a major boon to Nucor and domestic steel makers despite the lull in demand. Canada is the largest importer of steel to the United States at 19%, followed by Brazil at 18% and Mexico at 13% of total U.S. imports. This could divert more demand over to Nucor and improve their margins. Whether it is even possible to levy tariffs on day one is arguable, as Trump's 25% steel tariffs took nearly two years to implement during his first term. Is It the Calm Before the Storm? The markets haven't taken the potential tariffs seriously, as evidenced by the lull in prices. However, Nucor issued downside guidance on Dec 16, 2025, which has continued to put a ceiling on bounces. Nucor guided Q4 2024 EPS of 55 cents to 65 cents versus 89 cents consensus analyst estimates. The largest driver of lower earnings at the steel mills is the decreased volumes and lower average selling prices. However, the company expects earnings to improve in the second half of 2025. Nucor Is Ready for the Recovery The Apple Growth sheet mill factory in West Virginia was a $3 billion investment from Nucor to bolster capacity up to three million tons annually. The new mill has 1,700 acres to help the company supply steel products to the Northeast and Midwest regions. In total, Nucor has invested over $6 billion since the COVID-19 pandemic to bolster its capacity with upgrades and acquisitions. Its electric arc furnace (EAF) technology is proven to be more efficient and environmentally friendly than traditional blast furnaces, like the ones used by United States Steel Co. (NYSE: X), which had its planned merger with Japan’s Nippon Steel blocked by the Biden administration. Tesla: Making America EV Ready The leading domestic electric vehicle (EV) manufacturer, Tesla Inc. (NASDAQ: TSLA), will continue to be a benefactor of import tariffs. Not only does it reduce competition from imported EVs, but it also makes their domestically manufactured EVs more price competitive. Tesla's investment in domestic battery production, like their Nevada Gigafactory, would also give them a cost advantage over imported battery products. Of course, it doesn't hurt that Tesla CEO Elon Musk is part of Trump's inner circle and co-head of the Department of Government Efficiency (DOGE). Musk is also pushing for quicker regulatory approval of self-driving and autonomous vehicles (AV) to accelerate the launch of his Robotaxi network. Potential Retaliation Is an Overhanging Threat While Musk's close ties with Trump are a benefit to Tesla, they can also be a target in a tit-for-tat trade war, especially with China. Tesla generates around 20% of its revenues from China. China recently banned rare earth exports of germanium, gallium, and antimony to the United States on Dec 3, 2024, in retaliation to Biden's restrictions on semiconductor equipment products to China. Nothing is stopping them from taking action to hurt Tesla's China business. Other countries could also retaliate by levying higher tariffs on Tesla and U.S. vehicles, further leading to an escalation of trade wars.  Read This Story Online | |
| Written by Thomas Hughes 
Rigetti Computing (NASDAQ: RGTI) is making great strides with its quantum computing technology, offering investors a high-reward opportunity. Quantum computing is the next level, potentially providing exponentially more computing power than today's most advanced traditional computers. However, this stock also carries high risks, including concerns about capitalization, dilution, and whether it can even cross the finish line. The most likely scenario for this stock in 2025 is volatility, with a chance of retesting long-term lows and hitting new highs. What Does Rigetti Computing Do? Rigetti Computing is a leading manufacturer of quantum computers and the processors that drive them. Revenue is primarily driven by its cloud-based quantum-computing-as-a-service business. Its claims to fame are its commercially available 9-qubit processor and its industry-leading multi-chip processor, which is expected for full commercial release by mid-year. The Ankaa-3 is a scalable device that provides 82 qubits of processing power and is available on Rigetti’s Quantum Cloud Services platform. It is slated to be released on Amazon’s Braket and Microsoft Azure Quantum before mid-year. Other catalysts in 2025 include the expected launch of a new architecture, including a 32-qubit system linking four chips. The outlook for Rigetti Computing revenue growth is robust, and growth is expected to reach high-double to low-triple-digits by the decade's end. However, the forecasts may be aggressive due to sluggishness and underperformance in 2024. The 2024 results have the company on track to produce about $12 million in revenue, which is insufficient to make profits given the intense capital requirements of R&D and manufacturing. Regarding profits, the company is not expected to reach profitability until sometime in the 2030s and may not achieve its goal. Operating expenses in Q3 2024 were $18.4 million or nearly 8X the revenue and unlikely to decline significantly over time. The company is sufficiently capitalized for 2025, but it comes at a cost, and there are risks. The company diluted its stock by 30% in the first nine months of F2024 and compounded it with an additional sale in Q4. Execs believe the business is sufficiently capitalized and won’t need to raise additional capital, but it is questionable. With quarterly losses running in the $15 to $20 million range and without a significant advancement, the company will likely run out of cash before the decade's end, years before it reaches profitability. Mixed Sell-Side Support Points to Volatility The analysts and institutions are optimistic about this stock, rating it as a Buy in the first case and buying on balance for four consecutive quarters in the second. Still, there are offsetting factors to drive volatility. Among them are the consensus price target, which is 30% below the mid-January price action, insiders selling into the rally, and a high-short interest. The short interest and short-covering are central to the stock's explosive rise in late 2024 but are unlikely to have left the market. The more likely scenario is that short interest, ramping higher in Q4 2024 to over 20%, remains high due to repositioning, a sentiment echoed in the charts. Shares of RGTI surged more than 1000% in Q4 2024 on news, including Google’s advances with its Willow chip and systems. However, the rise was capped by comments from NVIDIA (NASDAQ: NVDA) CEO Jenson Huang, who doubted the timing of practical quantum computers operating at scale. In his view, useful quantum computing won’t be viable for at least ten years, pushing the outlook for revenue growth and profitability out by nearly a decade. NVIDIA collaborates in quantum computing, partnering with Rigetti to develop practical hybrid workflow, so Mr. Huang is in a position to know. The impact on RGTI stock price is a 70% pullback from the highs, a move creating significant overhand for this market. Rigetti's share price may bounce back, but setting new highs is unlikely, and how deep the market moves before rebounding is yet to be seen. The best target for support is near the cluster of moving averages at $3.65. 
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| Written by Thomas Hughes 
Delta Air Lines (NYSE: DAL) can fly to new highs in 2025 because the company continues to grow, cash flow is improving, the balance sheet strengthens, and capital returns are flowing. The takeaway from the Q4 report is that business remains strong on all fronts, costs are controlled, and results are better than expected, including better-than-forecast guidance. The outlook for 2025 is for revenue to sustain a high-single-digit growth pace, and it may be cautious because of momentum in the travel industry. Business and consumer trends are positive, and there is potential for economic tailwinds to develop. Although the outlook for Fed rate cuts is diminished, the cause is government policy; Trump’s policies are expected to drive demand at all system levels. Delta Air Lines: Record Results and Industry-Leading Performance Drives Value Delta Air Lines had a strong Q4, producing a record quarterly result, sealing the deal on a record year, and producing industry-leading operational quality. Total revenue came in at $15.56 billion, up nearly 9.5% year over year and 750 basis points above the analysts’ consensus reported by MarketBeat. Revenue performance is due to strength in leisure and corporate markets, led by premium and loyalty spending, which accounted for 57% of the full-year take. Cargo is also substantial, up more than 30%, with demand in all segments expected to remain strong in F2025. Earnings quality is also good. The company improved its total revenue per available seat mile by 40 bps, driving a GAAP operating margin of 11% and an adjusted 12%. The critical takeaways include record quarterly pre-tax earnings, up roughly 30%, an operating cash flow of $1.8 billion, and a full-year free cash flow of $3.4 billion. On the bottom line, revenue leverage and cost controls resulted in $1.85 in adjusted earnings, $0.11 or 600 bps better than analysts' forecast and up 45% year over year. Another factor in why Delta Air Lines will hit new highs in 2025 is guidance. The company forecasts Q1 revenue growth in the range of 7% to 9%, ahead of consensus, with an EPS midpoint of $0.85 versus the $0.77 forecast by analysts. Regarding the full year, Delta expects EPS growth above 10% versus a 10% consensus, free cash flow at the high end of forecasts, debt reduction, and year-ending leverage of less than 2x. Delta’s Balance Sheet and Capital Return Outlook Provide Lift for Share Price Delta’s balance sheet and capital return outlook are central to the stock price outlook. The Q4 results include another $1.5 billion in debt reduction, total debt down 8.5% sequentially and nearly 20% year-over-year, with additional reduction expected during the year. The reduction bolsters the company’s credit-quality debt rating and improves free cash flow and the capital return outlook. Delta hasn’t restarted share buybacks yet but is on track to do so in 2025, in addition to dividend distribution increases. The company increased by a nickel per quarter or 50% in 2024 and could easily maintain the same percentage gain in 2025. Ultimately, Delta is expected to return its distribution to the pre-COVID levels and grow from there. An increase to the $1.00 quarterly payments issued in 2019 is a 165% increase from the F2024 levels. Delta analysts' trends in 2024 were positive, and the trend continues in 2025, providing additional lift to the market. The trend includes increasing coverage, firming sentiment, and upward price target revisions that lifted the consensus by 40% in 12 months. The consensus estimate suggests this stock will rise by 15% from critical levels to a new all-time high of $77 this year, and revisions suggest an even higher price point will be reached. The first two revisions tracked by MarketBeat following the FQ4 results include two price target increases to $75 and $78, aligning with that outlook. The high price target of $90 was set by UBS in November, implying a 35% upside this year. Delta Air Lines Rockets Higher; Technical Outlook Aligns with Forecasts Delta Air Lines crossed a significant trigger point in 2024 and confirmed its bullish signal in 2025. The trigger point was crossing the previous all-time high; the confirmation in 2025 includes a pullback to test for support that was confirmed at a higher level. Support is now at the $60 level, with Delta’s stock price tracking for new highs. The 2025 price action includes a break to new highs that suggest a continuation of 2024’s price trends. In this scenario, the market can rise into the mid-$80 range to align with the analysts’ consensus forecast. 
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