Investing.com -- Wedbush tech analyst Dan Ives highlighted the urgent need for trade deals to address the challenges facing the US technology sector amid ongoing tariff disputes. The analysts pointed out the significant uncertainty and potential damage to the US and global economies, particularly the US tech industry, which has been thrust into the eye of the storm.
The imposition of tariffs and the subsequent ban on Nvidia (NASDAQ:NVDA)’s H20 chip in China have led to a blockade from the Chinese market, with Chinese tech giant Huawei set to release its 910C AI GPU chip for mass shipments by early May. This move is seen as a direct consequence of the trade war, which is perceived to be undercutting US tech companies while propelling Chinese tech firms forward.
The tech industry is facing a whirlwind of challenges as the supply chain is disrupted, raising questions about product releases from major companies like Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA), as well as the impact on AI deployments and capital expenditure plans in the US, Ives highlighted. The lack of clarity and guidance is expected to lead to a cautious earnings season, as companies are unable to plan effectively without knowing the "rules of the game."
"Does Apple still release its iPhone 17 this September?," Ives asks. "How will Tesla unveil its lower cost vehicle? What will this unprecedented uncertainty do for AI deployments and overall Cap-Ex plans in the US? Many questions..no answers for now."
Wedbush emphasizes the critical nature of progress in trade negotiations, particularly with China, warning that a prolonged period without deals could lead to a loss of confidence in the market and corporations, potentially triggering a pullback in purchases, budgets, hiring, and raising fears of recession or stagflation.
The analysts underscored the importance of the US maintaining its lead in AI and what he calls the fourth Industrial Revolution.
"For the first time in 30 years the US is ahead of China when it comes to AI and this 4th Industrial Revolution...being led by Nvidia, Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), Palantir (NASDAQ:PLTR), Oracle (NYSE:ORCL), Tesla among others," Ives commented. "However, this self-inflicted tariff and trade war has created an upside down supply chain that is holding US tech stalwarts like Nvidia and Apple back..while handing a growth opportunity on a silver platter to Chinese tech players like Huawei."
The call to action is clear: trade agreements must be reached to prevent further setbacks for US tech leadership.