The stock market has performed pretty well as the Biden-Harris administration draws to a close. Despite the steep decline in 2022, the S&P 500 has soared nearly 50%. Much of this performance was driven by huge gains for the so-called "Magnificent Seven" stocks.

Could this momentum continue in a Kamala Harris administration? And, if so, what's the best Magnificent Seven stock to buy if Harris wins in November?

Harris' proposals that could affect the Magnificent Seven

Harris has unveiled a wide range of economic proposals. Her campaign released an 82-page document outlining what she'd like to do to create what she calls "an opportunity economy." Not all of the proposals in this document affect the Magnificent Seven, but several could.

The vice president's plan to increase the corporate tax rate from 21% to 28% has received significant media attention. Although this is a large increase, it's still lower than the maximum corporate tax rate of 39% that was in place before former President Donald Trump's tax cuts went into effect in 2018.

Another Harris proposal is to quadruple the tax rate on corporate stock buybacks. The rationale behind this plan is "to encourage businesses to invest in growth and productivity."

Harris also wants the federal government to invest in industries that are important to the country's economic and national security. Her plan specifically identifies the following types of businesses that would be eligible for tax credits:

• Aerospace companies

• Artificial intelligence (AI) data centers

• Automobile manufacturers

• Biotechnology companies

• Clean energy manufacturers

• Semiconductor manufacturers

• Steel and iron producers

Evaluating the impact of these proposals

In theory, the members of the Magnificent Seven -- Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Meta Platforms (NASDAQ: META), Microsoft (NASDAQ: MSFT), Nvidia (NASDAQ: NVDA), and Tesla (NASDAQ: TSLA) -- would be affected equally by Harris' proposed corporate tax rate increase. However, in practice, this change could impact the big companies differently.

The following table shows the effective tax rates paid by the Magnificent Seven in their most recent fiscal years:

Data sources: Company 10-K filings. *Tesla received more tax benefits than it paid in taxes in 2023.

As you can see, none of the Magnificent Seven companies paid the full 21% corporate tax rate. Microsoft and Meta had the highest effective tax rates of the group. However, all of the companies have been adept at using the tax code to their advantage.

What about stock buybacks? Most of the Magnificent Seven members have repurchased shares in significant amounts. Apple has by far spent the most money on stock buybacks -- $70.6 billion in the nine months ended July 1, 2023. Increased taxes on stock buybacks could cause Apple and others to change their capital deployment strategies. However, I don't expect this would significantly impact their stock performance or underlying businesses.

Each of these companies could benefit from the tax credits for AI data centers proposed by Harris. As the three largest cloud services providers, Amazon, Microsoft, and Alphabet might be the biggest winners on this front. However, Nvidia could also be helped quite a bit because its GPUs are used heavily in AI data centers. In addition, Nvidia and Tesla could potentially receive tax credits offered to semiconductor makers and automakers, respectively.

The best Magnificent Seven stock to buy if Harris wins

So what's the best Magnificent Seven stock to buy if Harris wins the presidential race? The honest answer is that there's insufficient information to know which stock might benefit the most from the aforementioned policies proposed by the vice president. Furthermore, it's uncertain if she would be able to implement all of her plans should she be elected. The U.S. Congress advances legislation; the president only signs the bills into law.

That said, many economists believe that Harris' economic policies would help control inflation, while Trump's plans (especially his proposed tariffs) could cause inflation to rise. If these economists are right, interest rates would more likely be lower during a Harris administration than they would otherwise be.

While all the Magnificent Seven stocks should benefit from a lower-rate environment, I think the best pick of the group is Amazon. The company has a substantial debt load, which makes it a potentially bigger beneficiary of lower rates than the other Magnificent Seven members. Lower interest rates could also boost consumer and corporate spending, helping Amazon's e-commerce, advertising, and cloud services businesses.

Regardless of which person occupies the White House over the next four years, Amazon should benefit from the shift of IT spending to the cloud from on-premises. This migration will likely be accelerated by AI advances.

Surprisingly, Amazon stock has only climbed around 12% during Harris' time as VP. I suspect it could deliver much greater gains if she becomes president and interest rates decline further.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keith Speights has positions in Alphabet, Amazon, Apple, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

What's the Best "Magnificent Seven" Stock to Buy If Kamala Harris Wins in November? was originally published by The Motley Fool