3 Stocks Set To Make Hay Under Trump's New Budget Bill

The recently enacted One Big, Beautiful Bill (OBBB), signed by President Trump on July 4, 2025, is significantly reshaping market dynamics through new tax and regulatory policies, creating distinct winners. The legislation provides substantial benefits to the semiconductor sector, notably an uncapped 35% tax credit for new chip fabs, directly impacting companies like Intel, Micron, and Lam Research, with the latter also benefiting from increased AI sector funding. Concurrently, materials companies such as MP Materials are experiencing sharp gains, with its stock surging 50% on July 10 following a multi-billion dollar public-private partnership with the Department of Defense to bolster the U.S. rare earth magnet supply chain, underscoring a broader strategic shift in federal support.

Analysis

The newly enacted One Big, Beautiful Bill (OBBB) is a significant legislative catalyst creating distinct investment opportunities through targeted fiscal incentives and strategic federal funding. The semiconductor sector is a primary beneficiary, with a new, uncapped 35% tax credit for companies initiating US-based chip fab construction before 2027. This directly advantages firms like Intel (INTC), Micron (MU), and Taiwan Semiconductor (TSM), with Intel's stock already reflecting this optimism by gaining 15.6% in the last month, substantially outperforming the broader tech sector's 6.2% rise. The legislation's support extends to the semiconductor equipment sub-sector and the artificial intelligence industry, providing a tailwind for companies like Lam Research (LRCX), whose shares are up 39.9% year-to-date and recently received a 'Buy' rating from Goldman Sachs with a price target of $115. A parallel theme is the onshoring of critical supply chains, exemplified by MP Materials (MP), which saw its stock surge 50% on July 10 following the announcement of a multi-billion dollar partnership with the Department of Defense to build a domestic rare earth magnet supply chain, prompting a Canaccord analyst to double their price target to $55.

Key Decisions for Investors

• Investors should evaluate semiconductor manufacturers with committed US-based fabrication plans, such as Intel (INTC), as the uncapped 35% tax credit offers a material, long-term financial catalyst.
• Consider exposure to semiconductor equipment manufacturers like Lam Research (LRCX), which benefits from both increased fab construction and direct federal funding for the artificial intelligence sector, supported by strong stock performance and positive analyst ratings.
• Monitor companies aligning with US strategic industrial policy, such as MP Materials (MP), as public-private partnerships aimed at reducing foreign supply chain dependency are creating significant and rapid shareholder value.
• Re-evaluate sector allocations to capitalize on the clear tailwinds from the OBBB legislation, focusing on favored industries like semiconductors and strategic materials while being cautious of sectors that may have lost federal support.