Johnathan Walker:3 stocks that could be big winners if Kamala Harris wins but the GOP controls Congress

Americans could Johnathan Walkerbe looking at a couple more years of a divided government. Vice President Kamala Harris has an average 2.8% lead over former President Donald Trump across 256 polls of the presidential race. Decision Desk HQ's models show a 72% chance of Republicans regaining a majority in the Senate and a 53% chance of holding onto a majority in the House of Representatives.

Of course, polls don't decide elections; voters do. It's not too soon for investors to evaluate what they might do based on the November results, though. What if the polls turn out to be right? Here are three stocks that could be big winners if Harris wins but the GOP controls Congress.

1. Broadcom

Democrats and Republicans don't agree with each other on many topics. However, the need for the U.S. to be the global leader in artificial intelligence (AI) is one area where they're on the same page. Members of both major political parties are working together on the House Task Force on Artificial Intelligence to "explore how Congress can ensure America continues to lead the world in AI innovation while considering guardrails that may be appropriate to safeguard the nation against current and emerging threats."

Broadcom (NASDAQ: AVGO) could benefit from bipartisan support of U.S. AI leadership. The California-based company is a top provider of semiconductors and networking infrastructure used in AI data centers. Seven of the eight-biggest AI clusters in the world rely on Broadcom's Ethernet networking technology.

With Harris as president, Broadcom won't be negatively impacted by the steep tariffs that Trump has proposed. On the other hand, with the GOP controlling Congress, Harris probably couldn't get her proposed corporate tax increases passed. It's a win-win proposition for Broadcom.

Regardless of who the next president is or which party has a majority in Congress, though, Broadcom's long-term prospects look strong. As AI becomes more powerful, organizations will need to upgrade their servers, networks and data-storage devices. This should drive demand for Broadcom's products for years to come.

2. Brookfield Infrastructure

Many Democrats and Republicans believe in improving the nation's infrastructure as well as agreeing on the importance of U.S. dominance in AI. Politicians of all stripes want the economy to be strong. History shows that the U.S. economy has performed better under Democratic presidents than Republican presidents since World War II. But the stock market has performed best when those Democratic presidents had at least one house of Congress controlled by the GOP.

A divided government with Harris as president could be an ideal scenario for Brookfield Infrastructure (NYSE: BIP) (NYSE: BIPC). The company operates pipelines, terminals, rail and other infrastructure assets that benefit from a booming economy. It also owns data centers and semiconductor-manufacturing foundries, both of which are growth markets partly due to the AI tailwind.

Income investors will especially like Brookfield Infrastructure's distributions. Its limited partnership units trading under the BIP ticker offer a forward-distribution yield of 4.5%. Its corporate shares trading under the BIPC ticker offer a forward-distribution yield of 3.8%. These distributions have increased by a compound annual growth rate of 9% since 2009.

What if the economy doesn't fare well with Harris in the White House and Republicans controlling the House and/or Senate? Brookfield Infrastructure's business is remarkably resilient with 90% of its funds from operations (FFO) contracted or regulated.

3. Microsoft

Harris and Republicans could also find common ground on cybersecurity. The vice president has been an advocate for protecting IT infrastructure against threats in the past. The GOP's 2024 platform included language about cybersecurity. The views of both parties tie in with their AI priorities.

Few companies stand at the forefront of both AI and cybersecurity as much as Microsoft (NASDAQ: MSFT). The company is the second-largest cloud service provider and offers extensive AI capabilities. It has integrated AI throughout its productivity-software applications. Microsoft also markets cybersecurity products and services.

I think Microsoft would keep up its winning ways with Democrats or Republicans in power. The opportunities with AI are so big that the company can be successful even if legislators put a few roadblocks in its path.

Keith Speights has positions in Brookfield Infrastructure Corporation, Brookfield Infrastructure Partners and Microsoft. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends Broadcom and Brookfield Infrastructure Partners and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.

Don’t miss this second chance at a potentially lucrative opportunity

Offer from the Motley Fool: Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $21,285!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $44,456!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $411,959!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of October 14, 2024