Economists have floated the effects of tariffs on the global economy, but investors need to realize that these views are just that—opinions. Opinions based on theory that may or may not play out in the end, so what matters more is what is actually happening in the economy and the markets today. The answer is clear in this case, and that is increased interest for the biggest technology sector names to invest in the United States rather than away from it.

Companies like Apple Inc. NASDAQ: AAPL, Oracle Co. NYSE: ORCL, and others have decided to invest billions in their presence within the United States economy and manufacturing process. Now, economists would have suggested that tariffs might have caused the opposite effect to drive these names further away from dealing with the United States. Just the opposite happened, but one player in particular stands out in importance.

Taiwan Semiconductor Manufacturing NYSE: TSM has announced its latest round of investment in the United States, this time up to $100 billion, on top of its previous $65 billion position. This is important because Taiwan Semiconductor owns over 90% of the semiconductor supply chain, essential to the future of artificial intelligence and essentially all other chips needed in several industries.

Taiwan Semiconductor Stock: Unpriced Potential

Now that shares of Taiwan Semiconductor stock have traded down to 80% of their 52-week high, investors might wonder whether that makes for a potentially good buying opportunity today. While the expansion of their manufacturing presence in the United States is definitely bullish, investors shouldn’t get too carried away just yet.

First, they should check with the markets and Wall Street analysts. For starters, Barclays analysts decided to reiterate their Overweight rating on Taiwan Semiconductor stock as of January 2025, this time also boosting their valuation targets to a high of $255 per share. They call for not only a new 52-week high but also a net rally of 38% from today’s price.

Faced with this upside potential and the considerable outcome from this new investment in the United States, which might bring on additional institutional capital investment, investors can now note clear evidence pointing to the decline and capitulation from short sellers.

Over the past month, up to 9% of Taiwan Semiconductor’s short interest has declined as short sellers decide that the risk is not worth the reward at today’s lows. At the same time that these short sellers abandoned their views, up to $9.8 billion of institutional capital also made its way into the company over the past quarter.

Now that investors see the upside potential in Taiwan Semiconductor after its most recent investment announcement, it is time to understand how this might affect the rest of the chip industry.

NVIDIA’s Redemption Time at $110 Per Share

It’s almost as if the market knew that Taiwan Semiconductor would announce the positive news ahead of time since shares of NVIDIA Co. NASDAQ: NVDA bottomed a day prior at around $110 to $115 per share and are now attempting to recover their ground after selling down to 77% of their 52-week highs.

As of February 2025, analysts at Cantor Fitzgerald also saw NVIDIA stock falling into an Overweight rating. The stock commands a valuation of up to $200 per share, calling for an implied upside potential of 70.5% from where it trades today.

Investors should also remember that what is good for NVIDIA is good for Taiwan Semiconductors, given that they are one of each other’s largest suppliers and consumers.

Despite the recent decline in NVIDIA stock post-earnings, bearish traders found no reason to stick around and keep betting against this leader.

This is why up to 11% of the company’s short interest fell over the past month, giving investors another sign of bearish capitulation.

Intel’s Discount Might Be Erased

After a sluggish year, Intel NASDAQ: INTC stock trades at a dismal 45% of its 52-week high, but that might not last long.

Considering how bullish the market is becoming on the investment shifts in the United States manufacturing of chips and semiconductors, Intel might be next in line for a boost.

And there is more than just sentimental backing for this belief. Investors can look to Wall Street’s earnings per share (EPS) forecasts for $0.16 in the fourth quarter of 2025.

This swing is a massive change from today’s net loss of $0.02 per share, indicating a potential valuation boost in the stock as well.

That might explain why UBS Asset Management decided to boost its holdings in Intel stock by 8.2% as of February 2025, netting its position at $1.3 billion today, or 1.5% ownership in the company.

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Whatever you think of Donald Trump’s tariff policies, one fact stands out: companies are looking to invest more in the United States. They want to avoid the negative impacts of tariffs on their business. One firm doing just this is Eli Lilly and Company NYSE: LLY. The firm announced it will be investing $27 billion in the U.S. to scale up its manufacturing capabilities.

Eli Lilly and Company Today

LLY

Eli Lilly and Company

$868.59 -44.17 (-4.84%)

As of 03/7/2025 03:59 PM Eastern

This is a fair market value price provided by Polygon.io. Learn more.

52-Week Range

$711.40

▼

$972.53

Dividend Yield

0.69%

P/E Ratio

74.17

Price Target

$1,007.50

Before they even went into effect on Mar. 4, Trump’s tariffs were already impacting markets. The S&P 500 Index is now down over 3% since Trump took office as of the Mar. 4 close. Some of this is attributable to tariff fears as well as weakening economic indicators. The University of Michigan Consumer Sentiment Index notably dropped to its lowest level since Nov. 2023 in February.

U.S. government bond interest rates have exhibited a largely parallel shift down across all maturities longer than two years. This means investors are demanding more bonds, signaling a flight to safety from risky assets to safe ones. Markets worry that tariffs and a less optimistic consumer could raise inflation and slow growth. This would result in a bad economic outcome. This examines how a major U.S. investment and prevailing market concerns affect Eli Lilly, the largest pharmaceutical company globally.

Lilly’s $27 Billion U.S. Expansion: A Strategic Response to Tariff Uncertainty

In its Feb. 26 press release, Lilly outlined a plan to invest an additional $27 billion in the United States over the next five years. This would bring the company’s U.S. manufacturing investment to $50 billion since 2020. Lilly will build four new manufacturing facilities. They will boost the production of Lilly’s drugs “across therapeutic areas,” not just for its immensely popular weight loss and diabetes drugs. Three of these sites will be used to produce more of the active ingredients in its medicines. One will focus on making injectable pens for Mounjaro and Zepbound medications.

In addition to approved drugs, the sites will help Lilly increase capacity for pipeline drugs that aren’t approved yet. This move comes just days after the President had a meeting with leading pharma executives. He warned that tariffs could soon hit these firms if they fail to relocate their manufacturing to the United States. Trump is mulling a 25% tariff on imported pharmaceuticals, among other products.

Analyzing the Market Reaction and Implications of the Lilly Announcement

On the day of the announcement, Lilly shares were up around 2%. This signals that markets were moderately supportive of this move. This is a good sign, considering large investments often cause shares to fall. Investments in manufacturing are expensive and can hurt profit margins in the medium term.

However, from Lilly’s standpoint, these investments make sense. The company recently resolved its tirzepatide shortage. Tirzepatide is the main ingredient in Mounjaro and Zepbound. Given the rabid demand for these medicines, investing in manufacturing only helps ensure a shortage won’t return. This prevents a headwind on sales growth because supply can keep up with demand.

Another reason to like this announcement is that it doesn’t represent a massive change from what Lilly was already doing. With $23 billion in U.S. investment since 2020, this new announcement represents less than a $1 billion increase in investment per year for the next five years. This indicates Trump’s threats might not have unduly impacted the company. They likely weren’t the only factor behind the announcement. It is possible these threats simply influenced Lilly to make this announcement faster than it otherwise would have.

Built-in Characteristics and a Price Reduction Can Help Support Lilly in a Potential Downturn

It’s still unclear if the American economy is heading for an extended period of lower growth and higher inflation. This would not be great for Lilly’s business; however, it has some built-in protection. Since it sells drugs, insurance covers most of its sales. Within commercial insurance, Zepbound has an 87% coverage rate.

This means if American pocketbooks get squeezed, most will not have to demand less of the drug because their insurance covers it. For people without coverage, Lilly is also making smart moves to extend access. The company just reduced the cost of its out-of-pocket payment program for Zepbound by 9% to 29%, depending on the dosage. This can help support out-of-pocket demand if economic conditions worsen.

Despite Lilly’s high valuation, these factors bolster its investment appeal. Analysts at TD Cowen notably raised their price target to $1,050, signaling a 15% upside from the Mar. 4 closing price.

Before you consider Eli Lilly and Company, you’ll want to hear this.

MarketBeat keeps track of Wall Street’s top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on… and Eli Lilly and Company wasn’t on the list.

While Eli Lilly and Company currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

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