Tesla may be the highest-profile stock market winner over the last week, but there are several stocks which have outperformed the Elon Musk-led car company thanks to similar optimism about macro conditions under the incoming administration.
A Geo Group-operated immigration detention facility in California, pictured in 2013.
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Key Takeaways
- Tesla stock’s 39% gain from last Tuesday’s close through Monday’s is by far the most of any of the 101 American public companies valued at $100 billion or more, more than double the 18% rally of the next-highest performer of that bunch, software defense contractor Palantir.
- But other smaller companies have outstripped Tesla since Donald Trump secured a second presidential term, several of which are law enforcement-related areas that stand to benefit from Trump’s border control and tough-on-crime agendas.
- The only S&P 500 company to top Tesla is Taser stun gun parent Axon Enterprise at 40%, while shares of multibillion-dollar private prison
companies CoreCivic and Geo Group—which are Immigration and Customs Enforcement contractors—are up 76% and 75% since Election Day, respectively. - And a slew of cryptocurrency-related stocks have shot up over the last week as the world’s largest digital asset rocketed to a record of over $86,000 as traders reacted to Trump’s embrace of the industry on the campaign trail.
- Crypto exchange Coinbase shares are up 67% since last Tuesday and MicroStrategy, a 35-year-old enterprise software company most notable for its roughly $25 billion in bitcoin holdings, has enjoyed a 49% gain, while crypto-leaning retail investor platform Robinhood shares are up 31%, just trailing Tesla.
- Bitcoin mining stocks have similarly surged as the companies involved in the energy-intensive process of unlocking bitcoin on the digital blockchain enjoyed a double boost from a surge in crypto interest and hopes for loosening of regulations on the industry— shares of CleanSpark, Riot Platforms and Marathon Digital are up 67%, 54% and 54%, respectively.
Why Private Prison Stocks Are Up So Much
Boosting CoreCivic and Geo Group stocks further Monday was Trump’s appointment of Tom Homan as his “border czar,” with the former acting ICE director an advocate of a “humane” but “necessary mass deportation operation.” In a conference call last Thursday, Geo Group chairman George Zoley said he expects the government to fund 70,000 to 100,000 beds in ICE detention centers, roughly double the 41,500 beds now funded. Geo Group can up its operational ICE detention center beds from 13,000 to 31,000 by next year, forecasts Brendan McCarthy, an analyst at independent research firm Sidoti. McCarthy projects $3 billion in revenue for Geo Group in 2025, a 24% jump from its blended 2024 sales.
Key Background
U.S. stocks are up nearly across the board since the election, with the blue chip Dow Jones Industrial Average up 5% and the small-company Russell 2000 up 8% since last Tuesday. There are several tailwinds for this wide rally, but the potential for lower corporate tax rates and an expected uptick in mergers and acquisition activity in the looming Trump administration are among the most key drivers behind the financial market surge. Bernstein analyst Gautam Chhugani, who correctly predicted last week bitcoin would rise to over $80,000 if Trump won, titled his weekly note to clients “Welcome to the crypto bull market – Buy everything you can,” reflective of the near-euphoric attitude prevalent among crypto investors.
