Under the Trump tariff storm, the US technology industry is facing unprecedented challenges.

On Friday, local time, Dan Ives, senior analyst at Wedbush Securities, said in a podcast:

In my 25-year career, this is the scariest moment I have ever seen. In my view, these tariffs could set back the US tech industry by ten years.

From the internet bubble to the financial crisis... if I had to compare, this is absolutely the most terrifying crisis I have ever experienced.

Notably, this long-term bull on US tech stocks has become extremely pessimistic. He explained:

When you play high-stakes poker like this, you're betting on the economy. It will ultimately affect capital expenditure and large purchases. The current (Trump) administration has essentially triggered a snowball effect, and the snowball is rolling down the slope.

Based on his conversations with hundreds of investors, Ives predicts that 15-20% of the capital expenditure in the US tech industry has been automatically suspended.

Can iPhones Really Be Made in America? It's Difficult and Expensive

It is generally believed that one of the purposes of Trump wielding the tariff stick is to bring back American manufacturing. However, for American tech giants, this is very difficult.

Take Apple as an example. Ives believes that it is almost impossible for Apple to transfer production to the US mainland. He particularly pointed out the severe reality facing this tech giant at present:

Apple produces 93% of its iPhones in China. How much can India produce? Just 3% of iPhones. We are not talking about fairy tales here, but facts and realities.

Do you really think we can relocate Apple back? It would take $30 billion and three years to move just 10% of production capacity. Should we manufacture an iPhone priced at $500 in New Jersey or Illinois?

The reality is that we cannot. Have you ever visited a wafer factory in Taiwan? Spend three hours there and then tell me if we can do the same thing here? Here, people can earn $24 just working at Starbucks.

Previously, BofA analysis pointed out that although the US has the labor force base for final assembly of the iPhone, Apple's close collaboration with hundreds of suppliers still requires purchasing most components globally. Completely moving the production line back to the US would take many years. Even if only the final assembly is relocated, costs would rise by 25% due to the high labor costs in the US, and if equal tariffs are added, costs could surge by 91%. Unless tariffs are clearly long-term, Apple's mass relocation of production lines is unlikely.

Ives Is More Optimistic About Microsoft and Meta, Most Pessimistic About Tesla

In the face of the current situation, Ives suggests that investors turn to more defensive tech stocks. He believes that Microsoft and Meta will perform better than Nvidia and Apple:

Microsoft and Meta will perform better because their tariff risks are lower. Software and cybersecurity will become defensive sectors.

We have always told our clients to sell semiconductor stocks and shift to US software and cybersecurity stocks. Don't let this volatility scare you off; fasten your seatbelt and know that we will experience fluctuations in the coming months.

Ives believes that although Nvidia's stock price has fallen significantly, its future earnings growth expectations are still too high; he holds a cautious attitude towards Google's long-term prospects, believing that it needs to make breakthroughs in the AI field to restore growth; Meta may be more resilient in its advertising business, but its investments in the metaverse may be affected by market conditions; Amazon's retail business may face challenges, but its cloud computing business AWS remains a highlight.

Ives has always been considered a firm bull on Tesla, but this time he is most pessimistic about Tesla in Mag 7, believing that its brand has been severely damaged and its market share may continue to decline.

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