As the U.S. presidential election approaches, investors are bracing for its potential impact on markets—especially within the Big Tech sector. According to Wedbush analysts, a win for Trump could bring challenges for tech giants due to the likelihood of intensified U.S.-China tech tensions and possible new tariffs.
Impact on Global Tech and AI Growth
Wedbush analysts, led by Dan Ives, caution that a Trump victory could heighten the U.S.-China tech conflict. This scenario may disrupt supply chains for major companies like Nvidia (NASDAQ: NVDA) and could provoke retaliatory actions from Beijing, affecting firms such as Apple and Tesla. Such disruptions may also slow the rapid progress in AI development, as the global tech supply chain and innovation pace are put under pressure.
Federal Trade Commission's Role in Big Tech
Lina Khan, Chair of the Federal Trade Commission (FTC), plays a key role in regulating Big Tech. Her continued leadership could influence Big Tech policies under a Trump administration. In contrast, a Harris administration may replace Khan, which some analysts view as potentially more favourable to Big Tech and AI advancements.
Market Predictions for Big Tech: Bullish vs. Cautious
According to Wedbush, a Harris administration would likely be more supportive of Big Tech, benefiting companies that drive innovation in cloud computing and AI. Meanwhile, a Trump victory is seen as less favourable, creating a more cautious outlook for these sectors.
However, political gridlock due to mixed results in the Senate and House could delay major policy changes impacting Big Tech in the short term, providing some breathing room for the industry.
Tech Earnings Signal Continued Growth in Cloud and AI
Wedbush's confidence in Big Tech remains strong, backed by recent positive earnings reports from Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOGL), and Amazon (NASDAQ: AMZN). These companies are spearheading the shift to cloud technology, which analysts believe will drive the AI revolution over the next several years.
Despite some initial market reactions, such as the response to Microsoft's earnings, Wedbush remains optimistic about the future growth of the tech industry through 2025. This trend, they suggest, highlights robust momentum for tech advancements and market performance going forward.
Source: (Investing.com)
