A lack of clarity on trade policy should motivate investors to target a portfolio of stocks with strong underlying business fundamentals, according to Piper Sandler. Much of the market loss spurred by President Donald Trump’s early April tariffs have been unwound – but traders remain sensitive to signs of a slowing economy, risks of a recession and potential trade deals. The three major U.S. stock indexes are each on track to finish the trading month lower, dripping on Wednesday after fresh data showed the U.S. economy contracted in the first quarter. “We believe the markets will continue to be volatile and rangebound as the Trump policy pendulum continues to swing,” Michael Kantrowitz, chief investment strategist and head of portfolio strategy at Piper Sandler, wrote in a Wednesday note to clients. “In other words, we continue to believe the best way for investors to position is to maintain a quality bias to mitigate the portfolio impact of market swings.” Kantrowitz listed several stocks in the S & P 500 with stable, quality fundamentals that are his “favorite way” to maintain a balanced risk profile. The names he screened for have a large market value, cash flow profitability, a history of positive earnings per share revisions and free cash flow yield. Stocks such as these have outperformed over the past few years as the market has split between winners and losers and large and small stocks, even before tariff policies became front-of-mind, Kantrowitz said. “So far in 2025, we continue to see bifurcation in earnings which furthers our conviction to emphasize stocks with high quality fundamentals,” he added. Alphabet and Uber Technologies are two of Piper Sandler’s top quality plays, according to the firm’s stock screen. Google parent Alphabet has slumped more than 16% this year as the broader market sold off, hurting growth stocks and mega-cap technology businesses. Still, Alphabet last week reported better-than-expected revenue growth and strong search and advertising results, despite increasing competition in artificial intelligence. Alphabet also expects to invest approximately $75 billion in capital expenditures this year. Uber, on the other hand, is up about 33%, putperforming the broader market. The rideshare operator reports first-quarter numbers May 7 after impressing Wall Street with fourth-quarter revenue that beat analyst estimates and as adjusted EBITDA for December quarter soared 44% to $1.84 billion. Other standout plays with strong fundamentals are Booking Holdings, Eli Lilly and Vistra , Piper Sandler found. Eli Lilly shares have climbed more than 16.5% year to date, fueled by enthusiasm over the company’s daily obesity pill . Vistra, a stock that jumped last year as investors sought out beneficiairies of the data center boom, is down this year. Still, the consensus among Wall Street analysts is that there’s upside of about 31% from Vistra’s latest close as investors anticipate the power producer will strike deals to supply nuclear-and gas-generated power to data center developers.
