The Trump administration just killed the Broadcom Ltd. (Nasdaq: AVGO)-Qualcomm Inc. (Nasdaq: QCOM) deal – which would have been the largest tech merger ever.
You might think Michael’s best “Buy” in the tech space right now is one or both of those chip giants now that the dust has settled. Instead, his thoughts have turned to the Chinese steel tariffs – and finding companies insulated from the resulting fallout.
After doing his research, he’s turned up two American cloud-based software companies whose products are “immune from all that.” Both keep on reporting higher and higher earnings – and, Michael says, “have a long runway for share-price growth.”
Michael revealed these two picks – his best tech “Buys” right now – last night on CNBC’s Street Signs…
Click here to watch.
President Donald Trump just imposed 25% tariffs on steel imports and 10% import taxes on aluminum.
Those tariffs aren’t ideal – and they could lead to a trade war if Trump’s team isn’t careful.
But the desperate hand-wringing we’re seeing from the Washington and Wall Street crowds is, frankly, unseemly.
The Associated Press says that U.S. steel production is doing just fine, because the economy is now growing at roughly 3% a year.
Trade Partnership, a pro-trade business group, predicts that the tariffs will lead to 146,000 American job losses.
And Ira Shapiro, one of the architects of the North American Free Trade Agreement, told CNBC that President Trump “has done incredible damage to our relationship with Mexico, some to Canada and a lot to the European Union, all of which was not necessary and not desirable.”
There’s a problem here. All this naysaying presents a simplistic – and I would say false – narrative.
According to MarketLine, steel will be an $865 billion global industry by 2020. And we here in the United States are missing out… almost entirely. Of the world’s top 12 steel producers, only one is U.S.-based.
So if we do this the right way – if Trump’s seemingly reckless plan gets everyone rushing to the negotiating table – domestic firms will clearly benefit.
That said, Trump’s tariffs are far from a panacea.
The steel industry is a laggard in part because it hasn’t kept up with the times. And so steelmakers and other metal firms must invest in the innovative digital tech that is transforming so many other industries.
I’m talking about a technology that unites hardware, software, sensors, robotic systems, and more so that steel factories can operate far more profitably.
Today, factory-floor automation technology is worth roughly $109 billion. MarketsandMarkets says that spending in the sector will swell to $153 billion by 2022.
The firm I want to show you today is transforming steel companies – and firms in other hidebound industries – into advanced tech players.
It’s minting cash for its shareholders along the way.
And it’s about to start a second $1 billion share buyback program – so you’ll get paid as you wait for your gains…