How Trump’s AI Push Could Boost These 3 Agriculture Stocks

Key Points

• President Trump's push for technological developments in the agriculture sector could start to expand margins and EPS in these three stocks.
• Wall Street analysts agree with this view, as they've recently also placed double-digit upside bets on these stocks.
• Institutional buyers and markets agree by buying them and paying a justifiable premium.

As the technology sector has attracted most of the stock market’s attention—and capital—many new developments have been made in artificial intelligence and what’s now being called quantum computing. As the technology becomes more widely available and commercialized, a few industries will call upon these services.

Such as today's agriculture stocks, some of which President Trump has already appointed new views and agendas for. As of January 2025, the new view is that there is a dire need to bring technological advancements to the United States agricultural value chain, meaning that today’s stock market might benefit from productivity and earnings boosts.

This is why investors should keep the following names in their watchlists, knowing that in the coming months, they might turn out to be the outperformers they all need in their portfolios. Starting with shares of FMC Co. NYSE: FMC, or Corteva Inc. NYSE: CTVA, and even a lateral play in agricultural equipment and machinery manufacturing through Deere & Co. NYSE: DE, investors can get the right mix of potential upside and momentum started in their portfolios.

FMC Stock’s Discount Won’t Last

As it now trades at only 81% of its 52-week high, FMC stock is in border bearish territory, according to Wall Street’s definition for a bear market (a 20% decline or more from highs). However, there are reasons to believe this stock could quickly recover its lost ground and reach new highs in the coming months.

Some of these reasons include President Trump’s push for artificial intelligence development in the industry, which will boost FMC's margins. This is why Wall Street analysts now forecast up to $1.84 in earnings per share for the upcoming quarter, a massive jump of 166% from today’s $0.69 reported EPS.

Since EPS growth drives most of a stock’s price action, investors should not be surprised to see institutional buyers from State Street boost their holdings by 27.3% as of November 2024, bringing their net position to a high of $417.1 million today, or 5% ownership in the company.

This might also explain why analysts at the Royal Bank of Canada decided to keep their outperform rating for FMC stock while also boosting their valuations to a high of $81 a share. To prove this new view right, the stock would have to stage a rally of up to 45.7% from where it trades today.

Recent Boosts for Corteva Stock Make Sense

As of January 2025, analysts from the UBS Group decided to keep a buy rating on Corteva stock, only this time valuing it at $73 a share. From today’s price, this valuation would not only mean a new 52-week high but also a net upside potential of 14.2%, in addition to the bullish momentum the stock has portrayed already.

Knowing that this new high is a safe assumption for Corteva, especially as margins and EPS improve for the company, some bearish traders have decided to bail out some of their short positions. Investors can see this theme through the 12.3% decline in short interest for the stock over the past month alone.

More than that, there is a reason why the broader market is now willing to pay a price-to-earnings (P/E) ratio of up to 64.6x today, a steep premium above the agricultural industry’s average valuation of 13.2x today. Some may call this expensive, while others will understand that the market always pays a premium for stocks it believes will outperform.

Backing these growth views is also the Wall Street forecast for up to $2.01 in EPS for the same quarter 12 months from today, which implies a net growth rate of 10% to help keep these valuations higher. However, it does not yet reflect the potential technological impacts and benefits coming to Corteva.

Deere Stock’s Premium Is Justified Today

If these stocks start on their path to higher valuations, then another lateral player is needed to make this EPS expansion happen. This is where Deere stock comes into play, and the market is well aware of this theme taking place in the coming months.

This is where the company’s price-to-book (P/B) ratio of 5.7x today justifies a steep premium to the industry’s 2.7x multiple. This premium is again justified by the underlying themes in the space. However, the market is not the only participant willing to express its optimism for Deere stock.

Analysts from Truist Financial decided to keep their Buy rating on Deere stock and slapped a valuation of up to $550 a share in the name. To prove this new view right, the stock would not only have to make a new 52-week high but rally by as much as 15% from where it trades today.