MW Trump's One Big Beautiful Bill Act will really kick into gear next year. These are the stocks to watch, says SocGen.

By Jamie Chisholm

The OBBBA may provide an additional tailwind for equities in 2026

Caterpillar is among the beneficiaries of the capital expenditure incentives contained in the OBBBA, according to SocGen.

The majority of equity analysts and investors reckon the stock market will continue to rise in 2026, propelled by more interest rate cuts, a stoic economy and optimism over a broadening AI trade.

But there's another important tailwind for equities, according to Manish Kabra, head of U.S. equity strategy at Societe Generale: the One Big Beautiful Bill Act.

In a recent note penned with SocGen's global head of equity strategy, Charles de Boissezon, Kabra says the OBBBA "authorizes one of the largest spending packages in recent history," as it channels $4.1 trillion in the period out to 2034, in new outlays to defense, infrastructure and tax measures.

If temporary provisions become permanent, the total could climb to $5.5 trillion, the SocGen team adds. The boost is set to push annual fiscal deficits above $600 billion after 2025 before easing below $400 billion post 2030. But the good news for stocks is that "historically, profit margins have shown a strong positive correlation with fiscal deficits, with a roughly one-year lead - higher deficits tend to precede higher margins," they say.

The SocGen team highlighted what they consider to be five key areas of the OBBBA and then chose a basket of 30 stocks likely to benefit from them.

The first is what they call "making capex great again" as the OBBBA reinstates and expands investment incentives designed to boost domestic production. "These provisions aim to lower effective investment costs and improve cash flow, thereby encouraging equipment purchases, facility upgrades, and research and development expansion," says SocGen.

The possible beneficiaries include companies in the industrials, capital goods and tech hardware sectors, particularly in manufacturing, aerospace and automation. "Based on these provisions, we have added stocks that we think will be capex-incentive beneficiaries to our OBBBA basket, including Caterpillar $(CAT)$, Cummins $(CMI)$, Deere (DE), Eaton $(ETN)$, and Nucor $(NUE)$," says SocGen.

Second area is defense, where the OBBBA allocates roughly $150 billion - much front-loaded to 2026 - to bulk up the U.S. defense industrial base, including critical mineral supply chains.

Source: Societe Generale

SocGen says potential defense beneficiaries include General Dynamics (GD), L3Harris $(LHX)$, Northrop Grumman $(NOC)$, and Huntington Ingalls $(HII)$.

Next up are the tax changes that SocGen says should lift household disposable income - though mainly for middle- and high-income groups as cutting the Supplemental Nutrition Assistance Program (SNAP) will hurt lower-income families.

"Near-term gains favor consumer discretionary sectors - retail, autos, and leisure - as higher disposable income flows to middle- and high-income households. However, cuts to SNAP and Medicaid weigh on low-income consumers, pressuring staples and discount retailers," SocGen says.

To this end they add potential consumer discretionary beneficiaries including Ralph Lauren $(RL)$, Tapestry $(TPR)$ and Costco $(COST)$ to their OBBBA basket.

Source: Societe Generale

The fourth area to benefit from the OBBBA says SocGen are small businesses, where early-stage investors and private capital formation is supported through targeted tax relief and permanent financing tools. This should lead to, among other thing, higher after-tax earnings for sole proprietors and small firms; stronger loan demand for community banks; and better exit economics for early stage investors, SocGen reckons.

In this regard, SocGen highlights KeyCorp (KEY), M&T Bank $(MTB)$, and Apollo $(APO)$.

Finally, the energy sector. "The OBBBA is a clear win for oil, gas, and coal producers - especially those active in Alaska and the Gulf. It is a setback for large-scale wind and solar developers that use federal land," says SocGen. Oil and gas leasing should restart as the government starts selling drilling rights again, both onshore and offshore.

"Based on these provisions, we have added select companies that we see as set to benefit from the energy policy to our OBBBA basket, including Exxon Mobil (XOM) and ConocoPhillips $(COP)$," SocGen says.

Here's the full SocGen OBBBA basket.

-Jamie Chisholm

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November 27, 2025 06:32 ET (11:32 GMT)

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