“Magnificent Seven” stocks — the market darlings responsible for more than half of the S&P 500’s (^GSPC) 25% return in 2024 — may be poised for further gains as President-elect Donald Trump returns to the White House.
Trump’s pledge to peel back regulations and change tax policies, along with plans to invest heavily in artificial intelligence, have fueled bullish calls on Wall Street.
Wedbush’s Dan Ives expects the technology sector to be a big winner this year, with Magnificent Seven members Nvidia (NVDA), Microsoft (MSFT), Tesla (TSLA), and Alphabet (GOOGL) among his top five “tech winners” for 2025.
“We expect tech stocks to be up 25% in 2025 as the Street further digests a less regulatory spider web under Trump in the White House with Khan/FTC days in the rear-view mirror, stronger AI initiatives within the Beltway on the way, and a goldilocks foundation for Big Tech and Tesla looking into 2025 and beyond,” Ives wrote in a note to clients.
And Big Tech isn’t wasting any time warming up to the incoming administration. Meta (META) announced plans to end its fact-checking program — an effort long criticized by conservatives — and added UFC’s Dana White, a close Trump ally, to its board. Microsoft and Alphabet donated $1 million each to Trump’s inauguration fund, joining the likes of Meta and Amazon (AMZN).
Rational Equity Armor Fund portfolio manager Joe Tigay echoed bullish calls on tech, advising investors to focus on stocks that will benefit from a shift in regulation, tax policies, and trade. He told me that he sees Tesla, Palantir (PLTR), and Amazon as three winners under the incoming administration.
At close: January 10 at 4:00:01 PM EST
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“Tesla is a leader in the EV world, and I think the new administration will be favorable to them,” Tigay said. “And there’s big money to be had specifically in the cloud services. … In a new administration, tariffs around the world are going to be costly for a lot of companies, but Amazon’s infrastructure is so diverse that they can find places where tariffs are less impactful and be able to capture some of that gain for its consumers.”
Tigay also noted that Palantir’s focus on cost reduction and AI adoption uniquely aligns with the priorities of a second Trump administration.
IBM (IBM) CEO Arvind Krishna told me at Yahoo Finance’s Invest conference that he’s hopeful the incoming Trump administration will foster “a lot more innovation and less regulation,” laying the groundwork for a more favorable deal environment.
“If we have more certainty on the outcome, then we are willing to lean into things like M&A. … If the regulatory process and antitrust are going to be more certain, that allows you to take more risk,” Krishna said.
But it’s important to point out that not all tech, and not even all of the Magnificent Seven names, are expected to be winners. Analysts warn tariff risks coupled with a sluggish Chinese market could spell trouble for Apple (AAPL) — the second biggest contributor to the S&P last year behind Nvidia — and other hardware names.
At close: January 10 at 4:00:02 PM EST
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“While the incoming Trump Administration is likely to exempt Apple from import tariffs, there is a genuine risk that Apple will be targeted with retaliatory tariffs in countries negatively impacted by US import duties in unrelated categories,” MoffettNathanson’s Craig Moffett wrote in a note to clients this week.
Soon after the election, Morgan Stanley’s Erik Woodring warned that hardware tech stocks — including Dell (DELL), HPQ (HPQ), and Logitech (LOGI) — are among the “most at-risk” from tariffs given smartphones, PCs, tablets, wearables, and servers are still primarily assembled in China.
“We estimate that if President-elect Trump were to use executive orders to reinstitute Section 301 tariffs on goods imported from China, our coverage would face, on average, 4-7% downside to FY25 EPS,” Woodring wrote in November.
Seana Smith is an anchor at Yahoo Finance. Follow Smith on Twitter @SeanaNSmith. Tips on deals, mergers, activist situations, or anything else? Email seanasmith@yahooinc.com.
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