Investors Shouldn't Overreact to Tariffs: Insights from Analyst Dan Ives

Recently implemented tariffs by President Donald Trump on Mexico, Canada, and China have caused a stir in the technology sector. As a result, technology stocks have seen a dip in their value as investors react to the news.

Top tech analyst Dan Ives from Wedbush has weighed in on the matter, suggesting that the fear surrounding these tariffs may be overstated. According to Ives, while these tariffs could lead to a "game of geopolitical poker," he believes there is no immediate cause for panic.

In his remarks, Ives noted, "There have been many times over the past few decades that geopolitical tensions and government actions have been a major overhang on stocks." He references numerous historical contexts, including wars, international conflicts, and even the COVID-19 pandemic, that have similarly impacted market stability.

As the newly imposed tariffs begin to take effect, Ives acknowledges that investors are entering a nervous period, particularly those involved in growth stocks. However, he encourages them to take a step back, reminding them that these tariffs were anticipated for some time.

"It’s all about how long it lasts and when negotiations start to produce agreements with China, Canada, Mexico, and various other nations regarding reciprocal tariffs," Ives pointed out.

On the same day, Trump's address to Congress is expected to outline further plans regarding these tariffs and detail upcoming investments in the tech sector within the U.S.

Ives continues to stress that the real risk in the market largely stems from potentially aggressive actions relating to China and issues around chip export controls, which would significantly affect the tech market, especially in the AI domain. He emphasizes the critical role of NVIDIA Corporation, stating, "There is one chip in the world fueling the AI Revolution and it's Nvidia." He added that NVIDIA GPUs have become akin to "the new gold or oil" in today's tech environment.

According to Ives, if the tariffs remain enacted for an extended period, there could be considerable repercussions for U.S. consumers. He asserts, "We caution that this is all a game of high-stakes poker to get other countries to the negotiating table but will likely not endure for long."

The Tech Winners: Despite the current turmoil caused by tariffs, Ives believes that the long-term outlook for tech stocks remains robust. He identifies certain companies as pivotal players in the AI revolution who are likely to thrive in the future, regardless of the temporary setbacks caused by tariffs.

• Apple Inc: $325 price target
• Amazon.com Inc: $280 price target
• Salesforce Inc: $425 price target
• Alphabet Inc: $220 price target
• Microsoft Corporation: $550 price target
• Nvidia: $175 price target
• Palantir Technologies: $120 price target
• Tesla Inc: $550 price target

Ives believes any potential weakness in these stocks presents a buying opportunity, asserting that the fundamental demand for technology remains strong.

He urges investors to avoid the temptation to "run to the hills" during these tumultuous times and instead consider acquiring shares of the aforementioned AI leaders.

Price Action: As of Tuesday, the Invesco QQQ Trust, a common measure of tech sector performance, has experienced a decrease of 1%, settling at $491.91. Year-to-date, the ETF is down 4% and has seen a 10.3% increase over the past year.

stocks, tariffs, technology, investing