Keeping the U.S. on top in artificial intelligence will be a key focus area for President-elect Donald Trump, a Wall Street analyst says.
Wedbush Securities analyst Daniel Ives expects a Trump White House to focus on strengthening the U.S. position in artificial intelligence.
"We would expect significant AI initiatives from the Beltway within the U.S. that would be a benefit for Microsoft, Amazon, Google, and other tech players," Ives said in a client note Wednesday. Hyperscale cloud computing companies Microsoft, Amazon and Alphabet's Google are among the leaders in building AI data centers.
"Under a Trump Administration we would expect major AI initiatives within the U.S. government including the Department of Defense that would also be a major tailwind (for) AI players like Palantir," he said.
Tesla Seen Benefiting From Trump White House
Meanwhile, a Trump White House could be a negative for the electric vehicle industry, except for Tesla, run by Trump ally Elon Musk, Ives said.
"We believe a Trump presidency would be an overall negative for the EV industry as likely the EV rebates/tax incentives get pulled," Ives said. "However for Tesla we see this as a huge positive. Tesla has the scale and scope that is unmatched in the EV industry and this dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players (BYD, Nio, etc.) from flooding the U.S. market over the coming years."
Trump also might accelerate autonomous driving initiatives, including full self-driving, Ives said.
"The autonomous fast tracking will be front and center for investors in this scenario as some of the 2026/2027 goals for Tesla could be accelerated to stay on track with the China timeline for autonomous currently underway," Ives said. "A Trump win could add $40-$50 per share to Tesla's stock and exceed $1 trillion in market cap if autonomous/FSD is accelerated starting in 2025 and a tailwind for Cybercab."
On the stock market today, Tesla stock jumped 14.8% to close at 288.53.
FTC Chair Lina Khan: In Or Out?
A big question facing the Trump White House will be the status of Lina Khan, chair of the Federal Trade Commission. She has been an opponent of Big Tech and has challenged mergers and acquisitions in the tech sector.
"While some believe Trump/Vance would keep Khan, the growing view of the Street is that Khan would be out at the FTC and this could be a huge catalyst for more deal flow in the Big Tech landscape," Ives said.
Apple Likely Protected From Tariffs
While a Trump White House will move to increase tariffs on China-made goods, it likely will exempt Apple, Rosenblatt Securities analyst Barton Crockett said in a client note Wednesday.
"There is concern that Trump's talk of 60%+ China tariffs would be negative for Apple, which makes about 80%-plus of its iPhones there, and a large portion of other devices," Crockett said. "Our view, though, is that past is prologue, and the Trump administration would seek to exempt an American giant from large duties."
Crockett noted that Trump had a good relationship with Apple Chief Executive Tim Cook during his first term in office.
Meanwhile, China tariffs could hurt e-commerce giant Amazon, Crockett said.
"We believe that a large portion — potentially a majority of third-party merchandise on Amazon — (is) sourced from China," Crockett said. "So a 60%+ consumer tariff would be disruptive to Amazon, with tariff costs pushed onto product prices and higher prices probably depressing demand."
He added, "Given the inflationary impact of such high tariffs, and probably a negative reaction from consumers to substantially higher prices, we wonder if Trump would use the threat of tariffs to negotiate some other kind of deal. But, with control of Congress, Trump also might be able to move ahead and try to implement the tax rate adjustments/breaks he has floated as an offset to tariffs."
CHIPS Act Revisions Ahead?
Another issue facing the Trump White House is U.S. government support for the domestic semiconductor industry.
The CHIPS Act recently became an election issue when House Speaker Mike Johnson was quoted as saying Republicans will "probably" repeal the law if they control Congress, according to media reports. But Johnson later backtracked, saying the CHIPS Act is "not on the agenda for repeal," CNN reported. "To the contrary, there could be legislation to further streamline and improve the primary purpose of the bill — to eliminate its costly regulations and Green New Deal requirements."
In his recent interview with Joe Rogan, Trump said the "chip deal is so bad" and Taiwan "stole our chip business." He argued that applying hefty tariffs would be a better way of forcing companies to set up factories in the U.S., Bloomberg reported.
"You put a big tariff on the chips coming in," Trump told Rogan. "I say, 'You don't have to pay the tariff. All you have to do is build your plant in the United States.' We didn't have to give them the money to build a plant."
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
