State of the portfolio: What Biden’s address means for 10 Club stocks from Caterpillar to Ford

President Joe Biden ‘s State of the Union address put the spotlight on multiple tailwinds that will benefit 10 Club holdings including Caterpillar (CAT) and Ford (F). In Tuesday’s primetime address , the Democratic president touted his legislative accomplishments. The CHIPS and Science Act, which incentivizes domestic semiconductor manufacturing The Infrastructure Investment and Jobs Act, which funds upgrades to the nation’s roads, bridges, broadband availability, and other projects The Inflation Reduction Act, which seeks to accelerate the energy transformation While acknowledging that oil will be needed “for at least another decade,” Biden maintained his criticisms that large U.S. energy companies didn’t invest enough of their 2022 profits into boosting production to increase supply and mitigate sky-high gasoline prices this past summer, which saw average unleaded pump prices in the U.S. soar to a record above $5 per gallon. Gas currently costs under $3.50 per gallon. Here are some of the Club stocks that stand to get a boost from the president’s areas of focus in Tuesday night’s speech. Caterpillar Infrastructure investment was a key theme of Biden’s address. Since the infrastructure law was signed in November 2021 , the president said over 20,000 projects have already been funded. Caterpillar is a clear beneficiary of the government’s infrastructure spending, as we wrote a few weeks ago when the industrial giant became a Club holding. Those benefits to the company’s construction unit will likely accrue over a multiyear period. It’s not just a one- or two-quarter lift. Linde Linde, a longtime Club holding, supplies industrial gases needed at semiconductor manufacturing facilities, known as fabrication plants. Whenever Biden touts the billions of dollars being invested to build so-called fabs in the U.S., as he did Tuesday night about the CHIPS act, remember there’s a Linde connection. “Any top-tier player in the semiconductor space, we supply to them — whether it’s Samsung, TSMC, whether it’s Intel,” Linde CEO Sanjiv Lamba told Jim Cramer on Tuesday , prior to Biden’s speech. TSMC (TSM), short for Taiwan Semiconductor Manufacturing Company, and U.S.-based Intel (INTC) are both investing heavily to build facilities in America. For its part, Linde has announced a $600 million facility in Arizona to support TSMC’s operations in the state. “Across the world, we are at the heart of a semiconductor fab,” Lamba said, noting Linde’s semiconductor-related volumes are at an all-time high. Additionally, Linde — which reported earnings Tuesday — has clean hydrogen operations that stand to benefit from the Inflation Reduction Act . Ford Another topic of discussion in Biden’s State of the Union: plans to construct a national network of 500,000 electric vehicle charging stations by the end of the decade, as well as the recently expanded EV tax credits. In theory, both of those initiatives should help encourage more Americans to buy electric vehicles, which would be good news for Ford Motor. Although Ford has tested our patience recently with an ugly fourth quarter , its EV push has been a big part of our long-term thesis in the automaker. Energy holdings Biden on Tuesday repeated his familiar criticisms of oil companies — not investing enough of their soaring profits in 2022 into boosting production, while instead using that cash to buy back stock and pay out robust dividends to shareholders. However, based simply on Biden’s speech, it’s hard to identify specific benefits or negatives for the Club’s oil-and-gas producers: Devon Energy (DVN), Coterra Energy (CTRA), and Pioneer Natural Resources (PXD). The Club added to its Coterra holdings Wednesday . While the president pointed to oil companies’ 2022 profits as a reason for increasing the Inflation Reduction Act’s 1% buyback tax to 4% , that suggestion is unlikely to gain traction in Congress, according to analysts at Height Capital Markets. With Republicans controlling the House now, it would probably be dead on arrival, the firm said in a note to clients. Semiconductor stocks Returning to the semiconductor industry, the three chip companies in our portfolio — Nvidia (NVDA), Advanced Micro Devices (AMD) and Qualcomm (QCOM) — don’t make their own processors. They design the chips, then rely on companies like TSMC to actually manufacture them at their fabs. While the Club’s chip names may not directly receive manufacturing subsidies, in general, having a more geographically diverse supply chain is beneficial and adds resiliency to the system. Currently, Taiwan is responsible for the majority of the world’s chip manufacturing capacity . Major disruptions to the semiconductor supply chain occurred early in the Covid pandemic, causing shortages that have impacted the global economy over the past few years. AMD has said it will be a customer of TSMC’s Arizona facilities . Club name Apple (AAPL) wants TSMC to make some of its chips in Arizona, too. Nvidia also has said it plans to make some of its chips in the U.S. once advanced chip factories are up and running in the country. (Jim Cramer’s Charitable Trust is long CAT, LIN, F, AMD, NVDA, QCOM, AAPL, DVN, PXD and CTRA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

US President Joe Biden delivers the State of the Union address in the House Chamber of the US Capitol in Washington, DC, on February 7, 2023.
Saul Loeb | Afp | Getty Images

President Joe Biden‘s State of the Union address put the spotlight on multiple tailwinds that will benefit 10 Club holdings including CaterpillarFord

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