The tech sector is under siege. Since Donald Trump’s return to the White House, the rules of the game have changed, leaving investors scrambling.
US brokerage Wedbush calls it a “non-stop tariff war,” with policies that shift by the hour and send shockwaves through the markets. The uncertainty is wreaking havoc on tech stocks, particularly the biggest names in the industry.
The so-called Magnificent Seven – a group that includes Apple, Microsoft, Nvidia, and Amazon – have been in freefall, with billions wiped off their market value in a matter of weeks.
The problem is unpredictability
Tech executives and investors alike are struggling to grasp Trump’s approach to trade and technology.
Wedbush analysts note that the administration’s aggressive stance on tariffs and regulations is creating “white-knuckle worries” for growth investors.
No one knows what’s coming next, and for markets, uncertainty is worse than bad news. Tech companies rely on global supply chains, but new tariffs on semiconductors, AI hardware, and cloud infrastructure have thrown long-term planning into chaos.
Despite the turbulence, Wedbush remains bullish on tech’s long-term future. The investment firm believes that the artificial intelligence (AI) revolution is still in its early innings. The sector is experiencing the biggest transformation in 40 years, and no amount of political disruption can derail the shift towards AI-driven computing.
AI investment remains strong
The West Coast investment bank predicts that AI-related capital expenditure will surpass $2 trillion in the coming years. Nvidia, the undisputed leader in AI chips, remains at the heart of this spending boom. WedBush is adamant that once the political dust settles, tech stocks will rebound and reach new highs.
Tech’s fundamentals remain intact. WedBush highlights that despite the market panic, valuations for companies like Microsoft and Nvidia are not excessive. The current sell-off has driven stock prices lower, but earnings potential remains strong.
Companies with exposure to AI, cloud computing, and autonomous technologies are still expected to post double-digit growth over the next decade. Investors with a long-term view should see the recent slump as an opportunity rather than a warning sign.
Nvidia conference a key catalyst
One of the biggest upcoming catalysts for the sector is Nvidia’s GTC Conference. This annual event is where the company lays out its roadmap for AI and semiconductor development.
Wedbush believes it could be a turning point. If Nvidia delivers strong guidance and reassures investors about its long-term prospects, it could help tech stocks regain their footing. The investment firm has been on the phone with investors all week, urging them to stay the course.
The broader concern is that Trump’s policies will accelerate trade tensions with China. The last time he was in office, tariffs on Chinese-made technology products led to significant supply chain disruptions. This time around, the stakes are even higher.
AI and semiconductor manufacturing are at the center of a global economic battle, with the US, China, and Europe all vying for dominance. Companies that depend on Chinese manufacturing are already bracing for the worst. Apple, which relies heavily on Chinese suppliers, has seen its stock price tumble amid fears of supply chain constraints and retaliatory tariffs.
Short-term pain inevitable
Wedbush acknowledges that short-term pain is inevitable. The coming months could see more sell-offs as investors digest new policy changes. But history suggests that tech is resilient. The sector has weathered dot-com crashes, financial crises, and regulatory crackdowns. Each time, it has emerged stronger.
This time will be no different, according to Wedbush. The AI revolution is too big to be stopped, and companies at the forefront will eventually see their share prices recover.
For investors, the message is clear: volatility will remain high, but the long-term opportunity in tech is still compelling. Wedbush has reaffirmed its “outperform” ratings on Nvidia, Microsoft, and other major AI players, maintaining confidence that the sector’s underlying growth drivers remain intact. The AI boom is just beginning, and those willing to ride out the turbulence could be handsomely rewarded.