5 stocks to watch out for in December – and what to keep an eye out for

Stocks rose to record highs in November as Wall Street looked ahead to President-elect Donald Trump’s second term.

The S&P 500 Index rose 5.7%, the Dow Jones Industrial Average gained 7.5% and the Nasdaq Composite rose 6.2%. The Russell 2000 small-cap index rose nearly 11%, helped by expectations for faster economic growth and lower taxes under Trump and a Republican-controlled Congress.

Market participants will likely proceed to pay close attention to Trump and his policy proposals in December. Although Wall Street may also be attuned to the near-term economic outlook, especially inflation and the labor market.

The Federal Reserve is scheduled to make its final rate of interest decision of the yr on December 18. Policymakers have recently emphasized that they’re in no hurry to cut rates of interest, but investors are still pricing in the likelihood of one other quarter-point cut in December.

Below, we take a have a look at several stocks that might see big price moves in the approaching month.

Tesla

No S&P 500 company benefited more from Donald Trump’s re-election than Tesla (TSLA), whose CEO Elon Musk has cemented himself in the president-elect’s circle after spending hundreds of thousands of dollars on his campaign.

Shares of the electrical vehicle (EV) maker have surged nearly 40% since Election Day. The rapid growth, which pushed the corporate’s market value to greater than $1 trillion, got here at the same time as the brand new Trump administration promised to phase out government support for electric vehicles, including a $7,500 tax credit.

Wall Street expects Tesla to profit from Elon Musk’s influence with the following president, who will find a way to function each an informal adviser and co-chair of the newly created Department of Government Efficiency. Trump’s transition team has already reportedly outlined plans to ease regulations on autonomous cars, which could help make Musk’s dream of launching Tesla’s robotaxi service a reality. Musk could also encourage Trump to exempt Tesla vehicles from proposed tariffs on goods from China.

Tesla stock will remain in the highlight this month as Trump continues to recruit staff and determine the priorities of his next administration.

Sales power

Salesforce (CRM) reports earnings after markets close on December 3, and the outcomes could provide an early test of the technology’s ability to money in on artificial intelligence and justify record stock prices.

The enterprise software giant launched Agentforce, its AI-powered generative assistant, on October 25, with a goal of using AI agents 1 billion times by the top of 2025. Salesforce is reportedly hiring 1,000 sales representatives to implement the brand new tool.

Other software firms have reported strong interest in AI agents that operate with a greater degree of autonomy than chatbots corresponding to OpenAI’s ChatGPT. Crowdstrike ( CRWD ) executives said AI agent Charlotte posted triple-digit growth in its most up-to-date fiscal quarter.

Salesforce shares are up about 25% this yr after nearly doubling in 2023. Still, regardless that the stock is trading near a record, Wall Street is keeping the stock higher, with two-thirds of analysts tracked by FactSet rating it a “Buy.”

Honeywell

Shares of Honeywell (HON) rose 14% in November, helped by activist investor Elliott Investment Management’s mid-month disclosure that it had acquired a $5 billion stake in the corporate.

Elliott forced Honeywell to follow the lead of fellow conglomerates General Electric and 3M and split into two publicly traded firms in aerospace and automation, respectively.

Wall Street has rewarded these industrial giants handsomely for their spin-offs. Shares of GE’s clean energy unit GE Vernova (GEV) are up about 150% since its late March debut, and GE Aerospace (GE) is up nearly 80% year-to-date. Shares of 3M ( MMM ) are up 50% because the spinoff of its healthcare unit Solventum ( SOLV ).

Honeywell had already begun to divest itself of companies when Elliott acquired its shares. In October, the corporate announced plans to spin off its chemicals unit, a choice by CEO Vimal Kapur reflecting the corporate’s efforts to (*5*) Last month, the corporate sold its personal protective equipment division to a non-public equity firm for greater than $1 billion.

Micro-strategy

Shares of MicroStrategy (MSTR), a software company that has invested billions of dollars in Bitcoin, have surged 70% since Donald Trump’s re-election sparked a surge in cryptocurrencies.

MicroStrategy has spent over $20 billion to construct up a treasury reserve of 386,700 bitcoins price over $37 billion. As the world’s largest corporate holder of Bitcoin, Microstrategy’s stock has change into closely correlated with the cryptocurrency.

Cryptocurrencies surged after Donald Trump’s victory. He promised to embrace the industry, promising to create a strategic Bitcoin stockpile. Trump has not yet announced who will lead the Securities and Exchange Commission and the Commodity Futures Trading Commission, but each are expected to be much friendlier to the crypto industry than their predecessors.

The upcoming Congress, which Coinbase CEO Brian Armstrong called “the most pro-crypto Congress in history,” may prioritize passing cryptocurrency laws.

Like Tesla, Microstrategy stock could see price motion this month as the small print of Trump’s crypto program change into clearer.

Super Micro Computer

Super Micro Computer (SMCI), the AI ​​server maker that was considered one of the stock’s brightest stars earlier this yr, will likely remain in the highlight because it waits for word from Nasdaq on whether it would maintain its position on the exchange.

By the time the corporate filed a plan with Nasdaq in mid-November to meet the exchange’s requirements, Supermicro’s stock had lost 85% of its value. As of this writing, this plan was still under review. Since the corporate filed its plan, the stock has returned to positive territory this yr, but continues to be down 73% from its all-time high in March.

Supermicro’s problems began in August when the corporate delayed filing its annual financial report with federal regulators. In September, reports emerged that the Justice Department was opening an investigation into the corporate’s accounting practices, and in October, Supermicro’s auditor, Ernst & Young, resigned, citing concerns about accounting and board independence.

Last month, Supermicro found a brand new auditor, without whom its compliance plan would likely have been dead on launch. In December, Nasdaq could approve Supermicro’s plan and give it more time to report. But if it rejects the plan, Supermicro could have seven days to request a hearing to challenge the choice, which could extend the chance of delisting the corporate into the brand new yr.