The Federal Reserve this week decided to keep interest rates unchanged, causing Donald Trump to lash out at the Fed chief. Jerome Powell seemed satisfied with the current state of the economy and the job market. What he did not like was the high uncertainty prevailing in the market.
There’s a good reason why the uncertainty is causing problems for the Fed. It can’t reliably predict the future path of the economy if it doesn’t know what data to put in its models. This is pretty much the same problem that stock analysts have. With tariffs causing problems for American businesses, many investors are seeing their portfolios shrink.
In such a scenario, we decided to look at stocks that are largely protected from both tariffs and interest rates. This ‘protection’ comes from the fact that their bull thesis is unlikely to be impacted by either of these factors.
To come up with the list of stocks protected from tariffs and interest rates, we looked at the recently released list of Goldman Sachs’ top stocks with micro-driven volatility.
A team of technicians in a server room, testing and managing the newest server solutions.
10. First Solar, Inc. (NASDAQ:FSLR)
First Solar, Inc. operates as a solar technology company that offers photovoltaic (PV) solar energy solutions. The company provides its products and services to operators and developers of commercial and industrial companies, utilities, systems, independent power producers, and other system owners.
The company was recently upgraded by Mizuho from Neutral to Outperform with a raised price target of $259 from $218. This upgrade was due to the analysts expecting significant sales growth after 2026 and enhanced competitiveness in the U.S. According to the Mizuho analyst, the company’s advanced TOPCon technology helps it stay ahead of competitors using inefficient and older PERC cells.
FSLR reached an all-time high of $307 in 2024 but suffered a 45.94% loss in share price after that. The company maintained its revenue growth over the past few years with an average increase of 29.03%. In addition to the revenue, it also improved its net margins. Looking ahead into 2025, the company’s management expects better sales and earnings than previously anticipated along with easing off of warranty concerns related to its recent models.
9. Axon Enterprise, Inc. (NASDAQ:AXON)
Axon Enterprise, Inc. is a manufacturer, developer, and supplier of conducted energy devices (CEDs). The company operates in TASER and Software and Sensors segments. It also provides cloud-based software and hardware solutions.
The company reported strong financial results for the third quarter of 2024 with a 32% YoY increase in revenue. It expects about 30% YoY revenue growth in Q4 and EBITDA margins are predicted to be 24.6%. To achieve its growth goals the firm is focused on expansion through continued launch of new products. These newly launched products and services will help the company to maintain its long-term revenue growth.
International expansion is also a key driver of Axon’s growth and its strong brand image and early market presence puts it in a great position to expand globally. It has recently entered into a contract with the Canadian Police (“RCMP”) to provide 10,000 Axon Body 4 cameras. Looking at the growth prospects of the company the recent downturn in the stock price presents an attractive investment opportunity for investors.
8. ON Semiconductor Corporation (NASDAQ:ON)
ON Semiconductor Corporation is an intelligent sensing and power solutions provider. It operates in the Intelligent Sensing Group, Power Solutions Group, and Analog and Mixed-Signal Group segments.
The company’s stock has lost almost half its value in a year but the turnaround may be disconnected from the broader market or the economy. According to Wells Fargo, the company is setting itself up for a strategic acquisition of Allegro Microsystems.
“We believe the strategic rationale behind the deal makes sense from a product portfolio perspective / diversification for ON as it would become the market leader in magnetic sensing and add to its power semi business enabling better competition with larger peers.”
The analysts were quick to point out though that the core business still has weaknesses and that’s something investors should account for before they invest based on an acquisition trigger. The acquisition itself could bring volatility to the stock, as the Japanese owner Sanken, which has a 32.5% stake in the company, still hasn’t given its stance on the acquisition.
Allegro itself is currently going through a leadership change and things could look different once the new management comes in. This uncertainty could induce volatility and if it goes ahead, the stock could skyrocket.
7. PG&E Corporation (NYSE:PCG)
PG&E Corporation is an electric and Pacific gas company that sells and delivers natural gas and electricity. The company generates electricity through hydroelectric, fossil fuel-fired, photovoltaic, fuel cell, and nuclear sources. The company’s stock has taken a hit from the LA wildfires earlier in the year. Still down about 20% since the fires started. Slowly but surely, the utility company is inching up to its prior valuation.
There’s a lot going wrong for the company at the moment. UBS downgraded the stock this week as the California wildfire insurance fund is expected to deplete. The carnage caused by the Eaton fire also prompted Morgan Stanley to downgrade the stock last month. Both firms believe that the absence of a short-term catalyst means the stock could re-rate in the aftermath of the wildfires.
Despite all that, there is a growth story here that is worth betting on due to the shrinking valuation. The company has a 5.5GW data center in the pipeline and the power demand is only going to rise further as the US focuses on improving its AI infrastructure.
PCG has $63 billion worth of funding secured for capex till 2028, so investors have some visibility into the next 3 years of earnings without the fear of shareholding dilution. The earnings growth of 9% through this period drives the company’s bullish thesis. As soon as the wildfire dust settles, the market will start pricing in this growth and investors will be rewarded.
6. Constellation Brands, Inc. (NYSE:STZ)
Constellation Brands, Inc. is a producer, marketer, seller, and importer of wine, spirits, and beer. It sells its products to retailers, state alcohol beverage control agencies, wholesalers, on-premise locations, and distributors.
The company’s stock fell 17.09% right after the release of its Q3 earnings as it missed revenue estimates as well as EPS estimates. Despite only a narrow earnings miss, the company reduced its guidance for FY2025 which is what sent the stock crashing. According to the CEO, this reduction in outlook is due to the short-term uncertainty about consumers’ spending behavior.
Another key factor that can have a potential impact on Constellation is tariff as the company’s around 85% of revenues come from Mexican imports. A 25% tariff on Mexican goods would create major pressure on the company’s financials. However, there are chances that Trump might change his mind if Mexico fulfills the expected conditions.
Most importantly, Warren Buffett recently acquired a $1.24 billion stake in the company. Now that he is the sixth largest shareholder in the company, there’s a good chance that the firm will see some upside irrespective of where the economy is headed.
5. Dollar Tree, Inc. (NASDAQ:DLTR)
Dollar Tree, Inc. is a retail discount store that operates through Family Dollar and Dollar Tree segments. The company offers a variety of merchandise, consumable merchandise, and seasonal goods.
The company’s business is improving as shown by its Q3 earnings. It reported a 3.5% rise in net sales with store traffic improving by 1.6%. Average ticket, the average amount spent by the customer per transaction, went up by 0.2% as compared to the previous year. Though the improvements are not huge, they still boosted the gross profit of the company by 7.6%. This is just a small step towards the eventual turnaround of the company.
DLTR is considering shifting its focus to meaningful actions to improve business performance with things like multi-price offerings. Previously, the company sold everything for a dollar in its shop. More recently, this was bumped up to $1.25 but the multi-price offerings are where the growth lies. This will enable the company to be more flexible in terms of pricing. From the start of this project, the company has successfully tested its multi-price offering in 2300 stores and found favorable results. On average, the stores have shown a 3.3% growth in QoQ sales.
4. Albemarle Corporation (NYSE:ALB)
Albemarle Corporation is an energy storage solutions provider. The company operates in Ketjen, Energy Storage, and Specialties segments. It distributes its products to automotive, conventional energy, construction, grid storage, and other industries. After a 32% drop in a year, is the stock finally rebounding?
Albemarle has been a favorite of dividend investors for a long time. Its 5-year record isn’t much to talk about, but the 2.18% dividend yield keeps investors afloat. The company has just announced a $0.405 dividend and that is driving the short-term returns of the stock. However, the real opportunity lies in the long-term potential.
The long-term thesis could play out sooner rather than later. Currently, the EV market is facing a downturn. ALB’s performance in the last year reflects that. However, as soon as the EV market turns, shareholders will be rewarded.
What they do need to keep an eye out for is any potential shareholder dilution to maintain liquidity. On this front, the management has done a great job generating $702 million in operating cash flows in a year, despite lithium prices losing one-third of their value in the same time period. The management is hanging in, and so should the shareholders while they wait for the EV turnaround!
3. Moderna, Inc. (NASDAQ:MRNA)
Moderna, Inc. operates as a biotechnology company that develops, discovers, and markets messenger RNA therapeutics and vaccines. The company provides treatment of immuno-oncology, autoimmune, cardiovascular diseases, rare diseases, and infectious diseases.
MRNA recently extended its partnership with Merck to develop mRNA-based Personalized Cancer Vaccines (PCVs). This vaccine will be used with KEYTRUDA (pembrolizumab), which is the best-selling cancer treatment drug across the world. This collaboration has great potential to boost the company’s growth:
“There are positive signs going into 2025. The market volume for COVID-19 vaccines has been relatively stable for two years, and public health recommendations for vaccinations are normalizing. We are encouraged to see the emergence of a sizable and durable long-term COVID-19 vaccine market.”
The firm revised its guidance for 2025 from $2.5 billion to $1.5 billion which is disappointing. The main reason behind this is struggles in the RSV market and reducing demand for COVID-19 vaccines. MRNA’s stock was at its peak during COVID-19 as it went from $11.54 to $497, but after the pandemic, the stock fell sharply and continues to do so.
Now the company is focused on developing new vaccines including a seasonal flu vaccine (mRNA-1010), a vaccine for COVID-19, and influenza, and vaccines for cytomegalovirus (CMV) and norovirus. It has 9 vaccines in the final phase and the management is also expecting approval of 3 new products in 2025.
With collaboration and product innovation, the company is set to grow steadily. The stock has lost 70% of its value in a year and the lowered guidance is priced in. Once investors realize the strong pipeline of products, the stock could reverse for a bull rally.
2. Enphase Energy, Inc. (NASDAQ:ENPH)
Enphase Energy, Inc. is a developer, manufacturer, designer, and seller of home energy solutions. It offers semiconductor-based microinverter, microinverter units & related accessories, and other products and services. The company distributes its solutions directly to large installers, strategic partners, original equipment manufacturers, homeowners, and solar distributors.
Regardless of lower battery sales, Enphase Energy is growing its revenue by 6% QoQ. The battery segment is expected to recover in the next quarter. This rebound seems a good sign as some investors in the U.S. were recently concerned about Tesla’s powerwall competition. The upcoming fourth-generation battery is designed to occupy 60% less space and it will also lower installation expenditures. Moreover, the company plans to launch a new battery by 2026.
“Our fifth-generation battery will come out in Q1 2026, one year from today. And that also has a drastic cost reduction associated with it. I’ll give you more highlights on why in the next call. That will use prismatic cells. It’s got an energy density that is 50% higher.”
The company possesses a solid net cash position as it ended the recent quarter with a strong balance sheet with $1.8 billion of cash and $1.3 billion of debt. This indicates that the company is capable of paying off its long-term debts without putting any financial strain on its shareholders. Although the stock struggled during the last year, losing almost half its value, it has been rather stable in the last 6 months.
1. Super Micro Computer, Inc. (NASDAQ:SMCI)
Super Micro Computer, Inc. is a manufacturer and developer of storage solutions and high-performance servers. The company serves cloud computing, 5G and edge computing, artificial intelligence, and data center markets.
SMCI stock is up 28% this year but over the past year, it has lost more than half its value. The recent Nasdaq compliance is driving up the price and there is optimism that the firm will mend its ways and implement better financial controls in its business. Bigger investors may still be avoiding the stock but once they see the management’s resolve, they might want to come back in at discounted levels. That’s where the stock will take off.
This disconnect between the investors and analysts is what drives the company’s bullish thesis. On a fundamental level, the company’s customized server solutions are still in high demand. Oracle’s recent earnings showed the demand for cloud services is still as strong as ever.
Now that the company can finally focus on the business, the rising demand from Blackwell GPUs ramp-up is the perfect opportunity for investors, irrespective of where the economy is headed.
SMCI is not on our latest list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held SMCI at the end of the fourth quarter, which was 33 in the previous quarter. While we acknowledge the potential of SMCI as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as SMCI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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