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Over a week, S&P 500 (SPX) is down 11.54%, constituting a stock market crash as the index reverted to April 2024 level. The drop mirrors the correction of accumulated trade imbalances. Namely, President Trump’s worldwide tariff realignment is injecting uncertainty in inputs and outputs of businesses.

“I don’t want anything to go down, but sometimes you have to take medicine to fix something and we have such a horrible — we have been treated so badly by other countries because we had stupid leadership that allowed this to happen.”

President Donald Trump on Sunday

On Monday, U.S. Treasury Secretary Scott Bessent doubled down on tariffs, noting that America is “going to reindustrialize” as it “stopped making things” needed for national security. Bessent further noted that during the pandemic narrative we had “a beta test” for supply chain problems.

When talking about the market correction, Bessent believes it is transient, barely noticeable on a long-term chart. According to him, what is more important is to have better fundamentals rather than a “highly financialized economy”.

“if we put in sound fundamentals and follow through on this transformation, the dollar will do great—and so will the American people.”

U.S. Treasury Secretary Scott Bessant on Monday

With a signal like that this early on in the new administration, which companies are likely to follow through, owing to their fundamentals needed for national security?

Intel (Nasdaq: INTC)

As we have been stating all along, the largest US chipmaker is a critical national asset. This means that Intel’s transformation into the foundry business in 2021 was the first step in shoring up national security. And although it was a rocky road to start competing with industry leaders like TSMC and Samsung, Intel is now fully committed under the new leadership of Lip-Bu Tan.

Early tests also show that Intel’s new architecture process, Intel 18A, is a superior offering to TSMC’s equivalent. This is a positive inversion of previous milestones, in which Intel significantly lagged behind TSMC with its 10nm node process implementation.

Moreover, according to Lip-Bu Tan, Intel is going to be a more agile company that centers its offerings around software needs, instead of waiting for software, such as AI, to adapt to Intel. Altogether, this market correction is a boon for long-term value investors focused on fundamentals.

Presently priced at $18.61, INTC stock is aligned with WSJ’s bottom estimate of $18 per share. The average INTC price target is $25.18 while the ceiling is $100 if Tan’s transformation plan overdelivers.

Constellation Energy Corporation (Nasdaq: CEG)

Although Citigroup recently upgraded CEG stock rating from “neutral” to “buy”, Citi analyst Ryan Levin cut the price target from previous $334 to $232. This is still a significant upside potential against the present CEG price of $183 per share.

The new price target should return the power company above the September 2024 level of $224. At that time, Constellation made a deal with Microsoft to utilize its nuclear reactor capacity for AI data centers.

Speaking of nuclear power, in the first month of office, President Trump made it clear he supports it by removing regulatory hurdles around nuclear licensing. Under the executive order “Unleashing American Energy” all bureaucratic hurdles for all types of energy are amenable to revision.

The following month in February, the U.S. Secretary of Energy Chris Wright followed through with an order to unleash commercial nuclear power. This development is beneficial to Constellation as the largest holder of nuclear power plants in the US. 

Altogether, the energy company will continue to play a key role in America’s future, making it a fundamental that is difficult to ignore at this suppressed price point.

GE Aerospace (NYSE: GE)

At the end of March, we covered GE Aerospace as the world’s top supplier of engines and avionics for both military and commercial clients. Most recently, Northcoast analysts upgraded GE rating from “neutral” to “buy”. The new GE price target is $205, the same level to which Wells Fargo dropped it, from $250 to $203 per share.

Per WSJ aggregated forecast data, the average GE price target is now $224. Even the low estimate of $185 is higher than the present price of $170. 

Just like Intel and Constellation, GE represents one of America’s fundamentals. And that fundamental largely centers around air superiority to shore up the USD as the world’s reserve currency. On that front, together with Pratt & Whitney, GE is building the Next-Generation Adaptive Propulsion (NGAP), a platform-agnostic engine for the 6th gen aircraft such as F-47.

In the meantime as GE pushes the envelope of propulsion, the company has a steady cash flow from maintenance, repair, and overhaul (MRO) services across military and commercial clients. With the U.S. Defense Secretary announcing a record $1 trillion military budget, GE Aerospace’s current valuation offers a compelling chance to buy the dip.

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