Donald Trump, according to the latest polls, is likely to return as the U.S. President. This may well change prospects for mega-cap tech giants. According to Wedbush Securities’s tech analyst Dan Ives, here is how the outcome may shape the prospects of Microsoft, Amazon, Alphabet, and even Palantir Technologies, an emerging player.
Growth Opportunities in Artificial Intelligence and Defense
According to Ives, huge upside potential is expected for companies like Microsoft, Amazon, and Google’s parent firm Alphabet since Trump is anticipated to become a booster for the tech industry, especially AI. Its policy could look at expanding the AI push, which would boost government contracts and public-private partnerships.
A key component of this strategy could be increased spending by the Department of Defense. As Trump has stated that he will increase funding for building and improving national defense, DoD spending on tech-based defense solutions should rise. This will create an opportunity for cloud and AI companies with the capability to work under government defense programs. Microsoft, whose contracts with DoD are already in place, could receive a major share, and Amazon and Alphabet also could get a slice of this action.
Palantir Set to Gain from Increased Government Contracts
One other likely contender for a strong grip in this new situation would be Palantir Technologies. This particular company, itself an entity with specialty software packages especially focused on analytics offerings, is well-positioned to etch its marks if it proves to not lose steam about staying potent with governments at complex analytics deals, one would well expect as those initiatives intended for the tech sector at this new government administration.
Regulatory Landscape May Ease but Scrutiny Remains
Among the unknowns of this new term is regulatory policy. Of course, that could play well for the administration but might be its downfall with current Federal Trade Commission head Lina Khan. The move may also ease the pressure on the major tech companies that are facing antitrust scrutiny as they would be carrying less of a burden in terms of regulation.
However, analysts point out that Vice President-elect J.D. Vance could still keep a close eye on Silicon Valley, which sets mixed regulatory changes. In this case, this would suggest some relief for top tech firms while keeping the door open on competition and data privacy practices.
Autonomous Vehicle Sector Likely to Thrive; Clean Energy Faces Challenges
The Trump administration will also focus on self-driving cars, which would also benefit companies like Tesla and Waymo. Although these two companies could get support from a more favorable environment of policies for the AVs, the reduction expected in the Inflation Reduction Act may not have a healthy impact on clean energy plans. This change would also hit particularly chipmakers like Intel, which is seeking to reach its sustainability goals through the help of the IRA provisions.
Market Reactions: U.S. Stocks Up, Global Currencies Face Pressure
The markets welcomed the re-election of Trump positively. U.S. stock indices increased, and Treasury yields and Bitcoin, as investors reacted to the pro-growth outlook. Meanwhile, international assets such as the euro and the Mexican peso declined on concerns that Trump could impose tariffs that may signal more complicated times for trade.
