US stocks have been reclaiming some of their lost ground in recent sessions after the Trump administration and President Xi’s office agreed to pause reciprocal tariffs on each other’s products for 90 days.
The world’s largest economies will be working on reaching a broader, more permanent agreement during this three-month period.
According to Goldman Sachs, a bunch of US companies are positioned to benefit once Washington signs a proper trade deal with Beijing, hopefully over the next few weeks.
Two of these are Wynn Resorts and Qualcomm.
Wynn Resorts Ltd (NASDAQ: WYNN)
Goldman Sachs expects a Sino-US trade deal to serve as a meaningful tailwind for Wynn Resorts as it has significant exposure to the Chinese economy through its Macao casino operations.
Macao is among the world’s most popular gambling destinations. In fact, it’s broadly known as the “Las Vegas of Asia.”
Nearly half of WYNN’s adjusted property EBITDA comes from Macao, which makes it highly sensitive to trade tensions between the US and China.
A deal that reduces tariffs and improves economic relations would likely increase consumer confidence, boost tourism, and strengthen spending among Chinese high-end gamblers – Wynn’s core clientele.
Last week, the high-end hotels and casinos giant reported disappointing earnings for its fiscal Q1.
But its financials could improve rather meaningfully once the two countries sign a comprehensive agreement.
That’s part of the reason why Wall Street remains bullish on Wynn stock, given the consensus rating on it currently sits at “overweight”.
Analysts see upside in the Nasdaq listed firm to $105 on average, which indicates potential for another 10% gain from current levels.
Qualcomm Inc (NASDAQ: QCOM)
A US-China trade deal will prove a major catalyst for Qualcomm stock as it’s among names that have the highest revenue exposure to the largest Asian economy, according to Goldman Sachs.
The multinational based out of San Diego, California, is a global leader in 5G chipsets and is widely known as a supplier of smartphone processors as well.
At present, QCOM generates more than half of its revenue from China.
So, the expected trade deal between the US and China that reduces tariffs and eases restrictions on semiconductor exports will likely boost the company’s sales.
Qualcomm shares are worth owning for the strength of its financials as well.
In April, the Nasdaq-listed firm reported $10.84 billion in revenue for its second financial quarter that handily topped Street estimates.
At the time, the chipmaker issued better-than-expected guidance for Q3 earnings as well.
That’s part of the reason why Wall Street currently has a consensus “overweight” rating on QCOM stock.
Analysts currently see upside in the semiconductor stock to $176 on average, indicating potential upside of 17% from here, and that’s on top of a 2.35% dividend yield that it currently pays.
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