Consumer discretionary stocks have emerged as one of the market’s biggest winners in the wake of the US midterm elections.
This has been fuelled by easing inflation expectations, falling Treasury yields, and renewed optimism that the Federal Reserve may not need to keep monetary policy restrictive for as long as previously feared.
As investors rotate out of energy and other defensive corners of the market, strategist Todd Gordon believes a stronger outlook for consumer spending could create opportunities in select discretionary names.
Among his favorites are homebuilder Lennar, consumer-products powerhouse SharkNinja, and e-commerce giant Amazon.
Lennar: a housing play leveraged to lower rates
While homebuilders have spent much of the past two years navigating affordability challenges and elevated mortgage rates, Lennar could be one of the biggest beneficiaries if borrowing costs continue to retreat.
The company’s fiscal Q3 earnings reflected the difficult operating environment.
Lennar reported adjusted earnings of $1.23 per share, while gross margins on home sales came in at 15.8%, highlighting ongoing pressure from pricing and incentives.
The company generated $8.0 billion in revenue and maintained a manageable homebuilding debt-to-capital ratio of 16.6%.
Despite weaker profitability, Todd Gordon sees attractive long-term potential in the stock because housing demand remains structurally strong.
Lennar has continued building homes through the downturn rather than dramatically cutting production, positioning it to capture demand when financing conditions improve.
The investment thesis is straightforward: if inflation continues to cool and mortgage rates move lower, many prospective buyers who were sidelined by affordability concerns could return to the market.
That would likely support higher order volumes and improved pricing power across the homebuilding industry.
For investors looking to capitalize on a consumer recovery tied to lower interest rates, Lennar offers a direct way to express that view.
SharkNinja: riding innovation and consumer strength
SharkNinja has quietly become one of the strongest growth stories in consumer discretionary, combining product innovation with impressive execution across multiple categories.
The company reported third-quarter net sales of approximately $1.98 billion, up 21.2% year over year, while adjusted EBITDA surged roughly 46% to a margin of 23.3%.
Management was confident enough in the momentum to raise its full-year 2026 outlook, citing strength across both domestic and international markets.
Cooking and beverage revenue jumped 36.6%, while beauty and home-environment sales climbed 45.8%.
Gordon’s bullish stance centers on the idea that discretionary spending may accelerate if consumers receive relief from lower energy costs and moderating inflation.
When households spend less at the gas pump, they often have more flexibility for purchases such as kitchen appliances, beauty products, and household upgrades, all areas where SharkNinja has established powerful brands.
Unlike many retailers that depend heavily on discounting, SharkNinja’s growth is increasingly being driven by new product launches and category expansion.
That combination of innovation, market share gains, and improving macroeconomic conditions makes the stock an appealing way to participate in a resurgence of consumer spending.
Amazon: a pullback creates a long-term opportunity
Amazon remains one of the largest consumer discretionary holdings in the market, but investor concerns over massive artificial intelligence and infrastructure spending have recently weighed on the stock.
Those concerns emerged despite a strong third-quarter report.
Amazon generated $201.9 billion in revenue, up 12% year over year, while operating income surged 61% to a record $28.1 billion.
AWS revenue accelerated 39% to $46 billion, marking its fastest growth in nearly five years.
The company’s cloud backlog expanded to roughly $578 billion, underscoring the scale of demand for artificial intelligence infrastructure and cloud services.
The market’s hesitation stems from Amazon’s enormous capital spending plans.
Management expects approximately $220 billion in capital expenditures during 2026, largely directed toward AI infrastructure and data centers.
For Gordon, however, that pullback looks more like an opportunity than a warning sign.
Investors buying Amazon today are gaining exposure not only to a dominant online retail platform, but also to a rapidly expanding cloud-computing business and a highly profitable advertising segment.
If the post-election economic environment supports consumer confidence while AI demand remains robust, Amazon could be positioned to benefit from multiple growth drivers simultaneously.
As market leadership broadens beyond technology and investors search for sectors poised to benefit from easing inflation pressures, these three consumer-focused companies stand out as compelling ways to play a potential comeback in US discretionary spending.
AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.
