The Biggest Stock Winners and Losers From the Midterm Elections

The midterm elections shifted the political landscape in the U.S., and, regardless of anyone's politics, that will impact some industries and stocks in a meaningful way going forward. Stocks have historically performed well following the midterm elections, regardless of which party wins. The S&P 500 (SNPINDEX: ^GSPC) has climbed from November to November 95% of the time since 1938, so now should still be a good time to buy stocks in general.

However, let's look at some stocks set to benefit from the election results and others that could be hurt.

Winners

Tariffs have been a bane to the retail sector, and the election results give retailers hope that there could be a future shift in policy. This isn't likely to happen right away and may not take hold until after the 2028 elections. However, the market tends to be forward-looking and already anticipating better days for retailers. Here are three retail-oriented stocks that could benefit.

Amazon

Amazon (NASDAQ: AMZN) is the largest e-commerce company in both the U.S. and the world. The company's logistics network gives it a significant advantage, and it has been seeing strong operating leverage from its investments in AI and robotics. Meanwhile, any removal of tariffs should be a big boost to its retail operations, as it would increase consumer demand and help expand margins on the goods it sells.

Interestingly, Amazon's AWS unit is also viewed as a winner. While the elections were seen as a backlash against the AI data center build-out, this is expected to hurt neoclouds and benefit the big cloud providers. The reason is that the big cloud computing companies are generally better positioned to navigate regulatory hurdles, given their established relationships with utilities, regulators, and local governments, as well as their better financial resources and ability to secure long-term power agreements.

Shopify

Shopify (NASDAQ: SHOP) has become the e-commerce software company retailers are increasingly turning to in an effort to take on Amazon. The stronger its retail customers are and the better they are performing, the more it benefits Shopify, which gets a revenue cut through its Shopify Payments solution.

The company also appears to be one of the biggest potential AI winners. This is a top stock to own if tariff pressures ease and consumer spending strengthens.

e.l.f. Beauty

e.l.f. Beauty (NYSE: ELF) was one of the hardest-hit brands from tariffs, given most of its products are manufactured in China. Meanwhile, a $1 price increase for its namesake brand impacted its sales growth. As such, a rollback in tariffs could be a huge benefit to the company.

Meanwhile, the company's acquisition of Hailey Bieber's Rhode brand is proving to be a huge winner. The company is expanding Rhode's product assortment and distribution, which is leading to strong growth. A tariff-reduction tailwind would only add to its growth story.

Biggest losers

SpaceX and other neoclouds

Space Exploration Technologies (NASDAQ: SPCX) has become one of the largest neoclouds, with aggressive goals to expand its computing power capacity. Tougher permitting could put a real dent in its ability to grow as quickly as it would like, with permitting delays leading to lost revenue. Texas governor-elect Gina Hinojosa, for instance, specifically ran on limiting data center growth.

Meanwhile, it could also hamper SpaceX's ability to launch another U.S. mobile provider and complicate a potential merger with Tesla.

On the upside, if SpaceX can overcome technical hurdles and costs come down, its orbital data center ambitions could become a real advantage in a tougher terrestrial data center permitting environment. Unfortunately, the same can't be said for other neoclouds like CoreWeave (NASDAQ: CRWV), Iren (NASDAQ: IREN), and Nebius (NASDAQ: NBIS).

Palantir Technologies

Palantir Technologies (NASDAQ: PLTR) has become one of the most important AI software-as-a-service (SaaS) companies on the planet, with its solution akin to an AI operating system that makes AI more useful in the real world. Its growth has been outstanding, driven by U.S. commercial customers, but the U.S. government remains its largest client.

The company's U.S. government growth has been strong, but a potential shift in administration could slow it. Given the stock's hefty valuation, any slowdown in growth could hurt the stock. However, I'd likely view any significant dip as a buying opportunity.

Geoffrey Seiler has positions in Amazon and e.l.f. Beauty. The Motley Fool has positions in and recommends Amazon, Palantir Technologies, and Shopify. The Motley Fool recommends Space Exploration Technologies and e.l.f. Beauty. The Motley Fool has a disclosure policy.