We recently published a list of Top 10 Auto Parts Stocks That Could Surge On Trump’s Auto Tariff Relaxation. In this article, we are going to take a look at where AutoZone, Inc. (NYSE:AZO) stands against other top auto parts stocks that could surge On Trump’s auto tariff relaxation.
The corporate earnings season is about to kick off, but investors have something else on their minds: Donald Trump’s tariffs. Since the beginning of his term, Trump has wreaked havoc on the markets with repeated tariffs, resulting in the S&P index being down nearly 8% for the year.
We have observed that some of the most aggressive tariff policies are soon revoked or relaxed, resulting in a rally that brings back the stock prices to reasonable levels. We saw this recently when Donald Trump hinted that Big Tech companies may not bear the brunt of the tariffs as badly as previously thought. As a result, investors poured their money into these companies, thinking they may be critical for the US infrastructure.
A similar development is forming in the auto sector, with Trump likely to offer some relaxation when it comes to importing auto parts or manufacturing vehicles outside the US. Since auto parts companies are critical to the supply chain of this industry, we decided to take a look at the auto parts stocks that could surge following any news of relaxation in tariffs.
To come up with our list of Top 10 Auto Parts Stocks that could surge following Trump’s auto tariff reprieve, we looked at companies in the auto parts industry with a minimum market cap of $300 million that were outperforming their peers.
A technician in a mechanic’s uniform replacing an A/C compressor, signifying the company’s automotive replacement parts business.
AutoZone, Inc. (NYSE:AZO)
AutoZone, Inc. is a retailer and distributor of automotive replacement parts and accessories. It offers different products for sport utility vehicles, light trucks, vans, and cars. The company also provides batteries and accessories, engines, belts and hoses, CV axles, radiators, A/C compressors, and other products.
The company recently released its Q2 FY 2025 earnings, reporting a revenue of $4 billion. Commercial sales grew from 3.2% to 7.3%, with the domestic same-store sales growth accelerating to 1.9% from 0.3% in Q1. Free cash flow also improved from $179 million to $291 million. Driven by the investments in IT and inventory placement, operating expenses increased by 6.4%.
In 2025, the firm plans to increase international store openings. It maintained its goal to grow through new locations by opening 100 new international locations during 2025. Moreover, the company anticipates improvement in both DIY and commercial sales trends in the upcoming quarter. This is projected to be aided by continued execution of growth initiatives and easier comparisons.
Overall, AZO ranks 2nd on our list of top auto parts stocks that could surge On Trump’s auto tariff relaxation. While we acknowledge the potential of AZO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AZO but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
