We recently published a list of 10 Stocks To Trade Without Tariffs And Interest Rate Fears. In this article, we are going to take a look at where PG&E Corporation (NYSE:PCG) stands against other stocks to trade without tariffs and interest rate fears.
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.
Brightly-lit nighttime view of an electricity power grid with distribution lines and transmission substations.
PG&E Corporation (NYSE:PCG)
PG&E Corporation (NYSE:PCG) 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. PG&E Corporation (NYSE:PCG) 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.
PG&E Corporation (NYSE: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.
Overall, PCG ranks 7th on our list of stocks to trade without tariffs and interest rate fears. While we acknowledge the potential of PCG 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 PCG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
