The “Magnificent Seven” stocks received a boost of over $1.5 trillion in market value on Wednesday after U.S. President Donald Trump postponed his extensive tariffs for 90 days; relieving the pressure on the tech giants that had suffered losses during the past few sessions.
The gains did not compensate for the $3.4 trillion in value the companies have lost in total since their peak at the end of 2024, with roughly $2 trillion of that loss occurring since last week after Trump imposed tariffs on imports from China, a major market and exporter for tech goods.
But the pause in the tariffs allowed investors to buy back these expensive stocks and overpriced shares of companies deeply invested in artificial intelligence infrastructure as the companies had set aside billions for the development.
“The pause hopefully gives CFOs and COOs breathing room to proceed with AI- expansion plans that were slowed down because of trade friction and exposed tariffs on specialized equipment from Taiwan or South Korea,” said Michael Ashley Schulman, chief investment officer at Running Point Capital, who has exposure to the Mag 7 stocks through funds and family clients.
“Big Tech’s AI ambitions require enormous cross-border talent, complex hardware dependencies, and capital expenditure,” Schulman stated.
He pointed out that in conjunction with the strategic pause, the reinstatement of the tariffs would allow companies to resume long-term planning in view of the pending decisions, which still remains foggy.
The firm’s AI chip Nvidia, together with Apple, Tesla, Microsoft, Alphabet, Meta, and Amazon, boosted their share prices between 9.68 and 22.69%, which propelled an over 12% increase in the Nasdaq.
The implementation of the tariffs not only directly impacts the market, but they also significantly stifle spending on AI-based tools and services provided by tech companies. Quarterly fiscal results from various companies are arriving at the end of the month; this means a lot of budgetary scrutiny from Wall Street right around the corner.
Alphabet confirmed Wednesday that he would continue to make data center spending waves of $75 billion during the year. Microsoft already accounts for more than $80 billion on account this datacenter infrastructure investment spending boom.
Microsoft also pointed out that short-term strategic opportunities available in the AI vertical directly inform those long-term spending signals.
Trump’s statement on Wednesday did put in the spotlight a ban on many of the new tariffs for next 90 days, considering more restrictions on imports from China. His abrupt switch happened after less than a day of the onset of harsh new levies on the inbound shipments from a large subset of trade partners.He indicated that he would increase the tariff on Chinese imports to 125%, starting from the 104% level that he imposed at midnight. He also mentioned that other nations targeted by his new selective sanctions would have their tariffs reduced at the same time.
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