Jefferies raises Nvidia stock price target to $205 on strong demand
Investing.com -- The U.S. technology sector could face a decade-long setback if the latest round of tariffs on China and Taiwan are implemented in their current form, Wedbush tech analyst Dan Ives warned on Saturday.
U.S. stocks plunged for a second straight day Friday after China imposed retaliatory tariffs, fueling fears of a global trade war and potential recession.
The Dow Jones Industrial Average dropped 2,231 points, or 5.5%, its worst single-day loss since June 2020, following a 1,679-point decline Thursday. It was the first time the index fell more than 1,500 points on consecutive days.
The S&P 500 sank 5.97%, its biggest drop since March 2020, and is now down over 17% from its peak. The NASDAQ Composite index fell 5.8%, entering bear market territory with a 22% decline from its December record high.
“If these tariffs (in current form/rates) hold there is no debate... it would set the U.S. tech world back a decade in our opinion while China is the clear winner... and we see no debate,” Ives said in a client note.
“The U.S. is 4% of the world’s population and 26% of its GDP because of the U.S. consumer... and we ultimately believe one of the biggest assets in this country is the U.S. tech world and Silicon Valley.”
Ives pointed to the progress made by American tech firms in artificial intelligence, naming companies like Nvidia (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT), OpenAI, Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), Palantir (NASDAQ:PLTR), Oracle (NYSE:ORCL), and Tesla (NASDAQ:TSLA).
“For the first time in 30 years the U.S. is ahead of China when it comes to AI and this 4th Industrial Revolution,” he said.
“But in one day this tariff policy if enacted will create an upside down supply chain, massive costs, major CapEx delays due to uncertainty, and slow down U.S. tech innovation... not a debate.”
Drawing on more than two decades covering the sector, Ives called the proposed tariff move “the biggest debacle ever seen in the markets” and labeled it “purely self-inflicted by Trump.”
“It’s very easy to say ‘build in America’ behind a microphone in the Beltway,” he added. “The reality is so much different it’s almost a scary concept.
It takes 4–5 years to build a factory in the U.S., the U.S. labor force and cost structure goes against the entire concept of the modern supply chain.”
Ives warned that 50% tariffs on Chinese imports and 32% on Taiwanese goods could effectively shut off the U.S. tech sector from critical supply lines.
“iPhones made in the U.S. would cost $3,500 (vs. $1,000), and the AI Revolution trade would be significantly slowed down,” he said.
“The economic pain that will be brought by these tariffs are hard to describe,” Ives added. “These reciprocal tariffs... would cause an economic Armageddon and stop the U.S. tech world in its tracks," Ives concluded.