January saw markets navigate global uncertainties and domestic pressures. In Australia, the ASX 200 fluctuated, with materials and energy sectors reflecting global commodity trends. Globally, President Trump’s re-inauguration raised questions about trade policies and deregulation. As ASX reporting season approaches, investors are watching key earnings to gauge corporate resilience in this shifting landscape. Let’s dive into 4 stocks to watch in February.
#1 Telstra
Sector: Services
Telstra has long been a pillar of Australia’s communications sector, but as competition grows, it’s positioning itself for the future with bold investments in AI and 5G infrastructure. Under CEO Vicky Brady, the company is streamlining operations while betting on emerging technologies to drive future growth. But, shares have hardly moved in the last five years, and shareholders only have its dividend to thank for returns. However, its investments and operational efficiency may begin to pay off when the company reports its half-year results during reporting season. It’s a quality business with a fantastic dividend, and 2025 might be the year it catches a break.
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# 2 Alphabet
Sector: Tech
President Donald Trump was inaugurated in January, and several billionaires, including Alphabet co-founder Sergey Brin and CEO Sundar Pichai, were in attendance. It was a great example of billionaires looking to cozy up to the new president, given how much they have to gain or lose from Trump’s decisions, from antitrust to deregulation. In Alphabet’s case, an overhanging DOJ lawsuit regarding the monopolisation of search and search advertising has left the stock with the cheapest valuation of all the Magnificent Seven stocks at 25x forward earnings. Trump has previously highlighted concerns over the power of the business but more recently has advocated for not breaking up the search giant. In that case, a Donald Trump presidency with lesser regulation is a big win for Alphabet, especially when its AI investments are starting to pay off and more positive policies around the technology look to be being rolled out.
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#3 Woolworths
Sector: Consumer Goods
It’s been a torrid 12 months for Woolworths, not only from a shareholder standpoint but also from a PR perspective. Ongoing investigations from the ACCC (Australian Competition & Consumer Commission) and question marks over price gouging have made things challenging. Its FY2024 results last August showed it was losing some of its market dominance to Coles and price-conscious Aldi. New CEO Amanda Bardwell has a tough job on her hands this year, but her experience in the digital side of the business brings huge growth potential. If she can show that she has been able to stem some of the bleeding and lay out plans for ongoing growth in its results in February, then alongside the lowest valuation we’ve seen in years, it may be a stock attractive for investors.
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#4 Tesla
Sector: Consumer Goods
I mentioned the number of billionaires in attendance at Trump’s inauguration, and of course, Elon Musk was ever present, as he has been throughout President Trump’s campaign. In the last month, Tesla shares have faced a little bit of pressure following Donald Trump’s recent orders to pull EV incentives. However, this wasn’t entirely unexpected and doesn’t seem to concern Elon Musk. It’s worth remembering that during Trump’s last term as President, Tesla was the biggest winner from the Magnificent Seven, with shares skyrocketing 1600%. By contrast, under Biden—a leader who was seen as much more pro-renewable energy and drove key EV initiatives—Tesla shares were up just 50%. Of course, these periods represent very different growth stages for the company. Still, it underscores an important point: front-running policy changes can be tough for investors, as markets typically focus more on fundamentals than politics. Looking ahead, Tesla’s story has expanded beyond EVs. Its AI and autonomous technology advancements position the company for growth under Trump’s focus on innovation in these areas, even as his administration shifts attention away from emissions and traditional EV policies. These factors represent favourable tailwinds for Tesla in the years to come.
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