MW 14 stocks of companies that could benefit from Trump's state capitalism
By Philip van Doorn
Companies that already receive a lot of federal money might wind up having even closer ties to the government
These are among the companies with the highest projected sales growth rates among those already benefiting from large federal contracts or grants under the CHIPS Act.
In light of some unusual deals President Donald Trump has signed off on between the federal government and technology companies, it is time for investors to consider whether we are at the start of a significant trend that could help boost stocks.
Analysts at Jefferies prepared two lists of companies that might be subject to further "state interventions" by the Trump administration. Together, the lists include 65 companies, and we have screened them below for a smaller list.
You might have been surprised on Aug. 22 when Intel Corp. $(INTC)$ announced an agreement through which the federal government would take a 9.9% stake in the company in return for $8.9 billion in funding. That would include money authorized under the CHIPS and Science Act, which President Joe Biden signed into law in 2022, and additional funds through an agreement with the Commerce Department. Under the agreement, the federal government would also receive warrants to purchase an additional 5% in Intel's stock, which expire in five years.
The Intel deal followed a report in the Financial Times earlier in August that Nvidia Corp. (NVDA) and Advanced Micro Devices Inc. $(AMD)$ had agreed to pay the federal government 15% of their revenues in China from the sale of graphics processing units under newly required export licenses.
Reaction to Trump's recent technology deals:
-- Daniel Newman: Intel's management must now make these decisive changes - or Trump will do it for them
-- Adam Michel: Why Trump's business deals with Nvidia, Intel and other companies are really a tax on all of us
-- Barron's: Intel's Deal With the U.S. Comes With a Catch
Companies already receiving a lot of federal money
The Jefferies analysts, led by Aniket Shah, who heads the firm's sustainability and transition strategy team, published a research report for clients on Tuesday, "Who Might Be the Next Targets for the U.S. State Capitalism?"
Shah cited three broad factors that could lead to companies being subject to federal intervention:
-- Inclusion in "strategic sectors," as defined by the U.S. Cybersecurity and Infrastructure Security Agency
-- Existing ties to the federal government, including large defense contracts and funding through the CHIPS Act
-- "Exposure to adversary nations," which would include China, as evidenced by the FT report of revenue-sharing agreements between the federal government, Nvidia and AMD, which those companies haven't confirmed
The Jefferies team listed public companies with at least $500 million in "federal awards" with the most recent funding taking place within the federal government's fiscal 2025. In a separate list, the Jefferies analysts listed "major" recipients of grants under the CHIPS Act.
To screen this combined group of 65 companies, we focused on projected revenue-growth rates based on consensus estimates among analysts working for brokerage or research firms polled by FactSet. We also pared the list to companies with market capitalizations of at least $1 billion and majority "buy" or equivalent ratings among the analysts polled by FactSet.
The sales estimates were adjusted by FactSet to match calendar years for companies whose fiscal reporting periods don't match the calendar.
To set a baseline for expected sales growth, the S&P 500 SPX is expected to increase revenue at a weighted compound annual growth rate (CAGR) of 5.92% from 2025 through 2027. This screen was limited to companies with projected sales CAGR of at least 1.5 times the expected growth rate of the index, or 8.88%.
Here are the potential targets for U.S. state capitalism that passed the screen, sorted by expected sales CAGR from 2025 through 2027:
Company Ticker Two-year estimated sales CAGR through 2027 Rocket Lab Corp. RKLB 42.46% Oracle Corp. ORCL 19.76% Microchip Technology Inc. MCHP 18.68% Taiwan Semiconductor Manufacturing Co. Ltd. TSM 16.98% Micron Technology Inc. MU 15.40% SK Hynix Inc. KR:000660 13.42% Boeing Co. BA 12.43% Analog Devices Inc. ADI 10.74% Macom Technology Solutions Holdings Inc. MTSI 10.45% Coherent Corp. COHR 10.26% GE Aerospace GE 10.25% X-FAB Silicon Foundries SE XFABF 10.10% Texas Instruments Inc. TXN 9.95% Corning Inc. GLW 9.00% Source: FactSet
All of the companies were on Jefferies' list of major recipients of grants under the CHIPS Act, except for Oracle Corp. $(ORCL)$, Boeing Co. $(BA)$ and GE Aerospace $(GE)$, which were on the list of companies receiving at least $500 million in federal awards.
Here is a summary of analysts' opinions about the stocks, with prices and targets in local currencies where the stocks are listed:
Company Ticker Share "buy" ratings Sept. 2 price Consensus price target Implied 12-month upside potential Rocket Lab Corp. RKLB 65% 49.31 46.58 -6% Oracle Corp. ORCL 64% 225.30 248.85 10% Microchip Technology Inc. MCHP 71% 63.60 77.50 22% Taiwan Semiconductor Manufacturing Co. ADR TSM 96% 228.39 276.73 21% Micron Technology Inc. MU 85% 118.48 153.74 30% SK Hnix Inc. KR:000660 81% 260,500.00 338,935.28 30% Boeing Co. BA 79% 237.38 259.00 9% Analog Devices Inc. ADI 72% 248.32 275.19 11% Macom Technology Solutions Holdings Inc. MTSI 81% 131.05 152.54 16% Coherent Corp. COHR 83% 87.80 113.56 29% GE Aerospace GE 75% 275.39 302.79 10% X-FAB Silicon Foundries SE XFABF 83% 7.69 7.31 -5% Texas Instruments Inc. TXN 46% 199.81 209.00 5% Corning Inc. GLW 75% 68.47 72.17 5% Source: FactSet
Click on the tickers for more about each company.
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-Philip van Doorn
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September 03, 2025 08:55 ET (12:55 GMT)
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