KeyBanc Capital Markets indicated that software stocks are positioned for potential gains following Donald Trump's victory in the U.S. presidential election.
The company underlined that expected policy changes under Trump, like a pro-growth and deregulation agenda, might promote more investment in the technology and software industries.
KeyBanc's research highlighted the possible major growth driver—lower corporate tax rates—as a result of which Tax cuts would help businesses with large tax obligations, the company observed, therefore fostering a more favorable atmosphere for corporate growth and profitability.
“With Donald Trump as president, we see a likely backdrop of lower corporate taxes, which would be broadly positive for high-tax-paying companies within our coverage,” KeyBanc said.
KeyBanc cautioned, however, of probable hazards connected to trade policy. The paper discussed the significance of keeping an eye on possible tariffs, especially whether they would just affect China or have more general application to other nations.
“Additionally, we would be watchful for potential tariffs and whether that pertains to China solely or extends globally. Broadly speaking, we view the post-election outlook as neutral-to-positive for our broader software coverage,” KeyBanc stated.
Among the companies highlighted by KeyBanc as possible winners under the new environment post the Trump victory are Synopsys (SNPS, Financials), Cadence Design Systems (CDNS, Financials), Workday (WDAY, Financials), and Autodesk (ADSK, Financials).
