×
Pro Analysis

7 tech stocks that can thrive if Trump sparks inflation, Goldman says

Attendees pass the Juniper Networks pavilion in a trade show.
Simon Dawson | Bloomberg | Getty Images
Attendees pass the Juniper Networks pavilion in a trade show.

Wall Street is concerned that President Donald Trump's economic agenda may spur inflation, which could have a negative impact on the profitability of many companies.

Consequently, Goldman Sachs' technology research team shared a list of firms that can do well even during time periods of rising prices.

The Labor Department said Wednesday the consumer price index increased by 2.5 percent in the 12 months through January, the largest annual gain since March 2012.

"One of the biggest themes on the back of the US Presidential election is the anticipated return of inflation, aided by increased fiscal stimulus," analyst Heather Bellini wrote in a note Monday to clients.

"During periods of reflation, pricing power becomes increasingly important as companies that have the ability to raise price are far better positioned to deal with rising input costs vs. those who are more 'price takers' within their respective industries."

To find the best technology stocks with pricing power, Goldman searched for companies with dominant market share, higher average selling prices (ASP) for its products relative to its industry peers and wide gross profit margins.