Key Insights:
Trump is likely to prioritize supporting the tech industry to strengthen the U.S.'s competitive edge and preserve its position as the global technological leader.
A key focus for the incoming Trump administration will likely be securing American dominance in the global AI race, with particular emphasis on outpacing China.
While antitrust lawsuits may continue to dampen investor sentiment, these legal battles are expected to drag on for years due to prolonged appeals.
If Trump implements tariffs of 60% or more on Chinese imports, it could provoke retaliatory measures from China, potentially targeting U.S. companies that manufacture there.
I remain constructive on tech companies, especially those involved in AI. Big tech companies that are involved in antitrust lawsuits, pursuing M&A activity, or focused on AI are likely to benefit from a second Trump administration. These include the "Magnificent Seven," TSMC $Taiwan Semiconductor Manufacturing(TSM)$ , Broadcom $Broadcom(AVGO)$ , Arm $ARM Holdings Ltd(ARM)$ , AMD $Advanced Micro Devices(AMD)$ , and Oracle $Oracle(ORCL)$ .
Full Article:
Trump Sweep:
Trump won the presidential race, the Republicans secured the Senate, and they are likely to take control of the House. So far, Republicans have secured 211 seats and need just 7 more to gain control of the House.
Why Big Tech Will Benefit from a Trump Sweep:
1) Potential Removal of Lina Khan:
Lina Khan is the Chair of the Federal Trade Commission (FTC), the agency responsible for enforcing antitrust and consumer protection laws in the U.S.
Four of the "Magnificent Seven" companies— $Amazon.com(AMZN)$ , $Apple(AAPL)$ , $Alphabet(GOOG)$ and $Meta Platforms, Inc.(META)$ are currently being sued by the Department of Justice (DOJ) and the FTC for monopolistic practices. In the worst-case scenario, Google could face a breakup.
$Amazon.com(AMZN)$ and $Meta Platforms, Inc.(META)$ have called for Khan to recuse herself from antitrust investigations due to her previous criticism of big tech.
The FTC has also blocked several mergers and acquisitions (M&A), with U.S. Chamber of Commerce officials criticizing Khan for operating a "black box" in merger reviews.
Many industry observers expect Trump to replace Lina Khan. Elon Musk may also leverage his influence with Trump to push for Khan’s removal. Trump could offer Musk an advisory role, such as "Secretary of Cost-Cutting," to reciprocate for Musk’s substantial financial contributions (at least $130 million) to Trump's campaign.
The potential removal of Lina Khan would likely be beneficial for big tech.
Source: Twitter
2) Trump is Expected to Be Business-Friendly:
Trump’s pro-business stance is likely to encourage more mergers and acquisitions (M&A) and an overall reduction in tech industry regulation.
Several major tech CEOs, including those from $Meta Platforms, Inc.(META)$ , $Apple(AAPL)$ , $Alphabet(GOOG)$ ,OpenAI, and $Amazon.com(AMZN)$ , have expressed well wishes to Trump. Some analysts speculate that big tech companies may seek Trump's help to pressure the EU and UK to stop imposing fines on U.S. firms through antitrust rulings.
3) Energy Deregulation:
Although Trump has made conflicting statements about nuclear energy production in the past, it is expected that his administration will push for broader energy deregulation, which could lower energy prices. This would benefit big tech companies, especially given their large-scale energy consumption for AI operations.
The 2024 GOP platform, as stated at the Republican National Convention, pledges to "unleash energy production from all sources, including nuclear, to immediately slash inflation and power American homes, cars, and factories with reliable, abundant, and affordable energy."
Overall, this deregulation would likely make electricity more accessible and affordable for big tech companies.
Source: JP Morgan
4) AI Deregulation:
The Trump administration is committed to strengthening America's leadership in artificial intelligence (AI).
Trump is likely to repeal Biden’s executive order on AI, as he views it as a hindrance to AI innovation.
5) CHIPS and Science Act:
Although Trump previously criticized the CHIPS Act as “so bad,” and House Speaker Mike Johnson, a Republican, attempted to repeal it, the CHIPS Act is unlikely to be rolled back.
CHIPS Act aims to strengthen domestic semiconductor manufacturing, design and research.
Companies like $Taiwan Semiconductor Manufacturing(TSM)$ and $Samsung Electronics Co., Ltd.(SSNNF)$ have established foundries in the U.S. to benefit from the incentives provided by the CHIPS Act. Intel is the biggest beneficiary, having received an $8.5 billion award.
The CHIPS Act is widely seen as part of a broader effort to bring advanced manufacturing back to the U.S.
TSMC and GlobalFoundries are expected to receive their final awards under the CHIPS and Science Act, according to Reuters.
Conclusion:
Trump is likely to prioritize supporting the tech industry to strengthen the U.S.'s competitive edge and preserve its position as the global technological leader.
A key focus for the incoming Trump administration will likely be securing American dominance in the global AI race, with particular emphasis on outpacing China.
While antitrust lawsuits may continue to dampen investor sentiment, these legal battles are expected to drag on for years due to prolonged appeals.
If Trump implements tariffs of 60% or more on Chinese imports, it could provoke retaliatory measures from China, potentially targeting U.S. companies that manufacture there.
I remain constructive on tech companies, especially those involved in AI. Big tech companies that are involved in antitrust lawsuits, pursuing M&A activity, or focused on AI are likely to benefit from a second Trump administration. These include the "Magnificent Seven," TSMC $Taiwan Semiconductor Manufacturing(TSM)$ , Broadcom $Broadcom(AVGO)$ , Arm $ARM Holdings Ltd(ARM)$ , AMD $Advanced Micro Devices(AMD)$ , and Oracle $Oracle(ORCL)$ .
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