Trump’s second term may unleash a new wave of acquisitions, and mid-cap stocks could be in the crosshairs of acquirers.surged higher following Donald Trump’s election win earlier this month as Wall Street celebrated the new business-friendly administration and the more lenient regulatory environment it is expected to bring.
Recent interest rate cuts from the Federal Reserve have lowered the cost of capital for companies to do deals, particularly those involving debt. The dollar-volume of M&A activity in 2025 will rise 20%, compared to a 15% decline this year, says Goldman Sachs’ chief U.S. equity strategist, David Kostin.
Andrew Peck, co-chief investment officer at $43 billion Baron Capital, predicts that sectors like healthcare, consumer staples and especially technology—where larger companies are sitting on big cash piles—are ripe for M&A activity. CFRA Chief Investment Strategist Sam Stovall agrees about healthcare and consumer staples but adds to the list depressed sectors like industrials and materials.
Top of both the growth and value lists was Dropbox, the $8.5 billion cloud storage company. Though shares are down some 7% this year, Dropbox boasted an impressive 55.6% return on invested capital, meaning that management has had a good track record of investing in profitable projects.
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