TLDR
- Apple, Amazon, and Microsoft stocks are down year-to-date (AAPL -21%, AMZN -16%, MSFT -8%) due to tariff concerns and economic uncertainties
- Tech devices including smartphones and computers have been exempted from reciprocal tariffs
- Wall Street remains bullish on Amazon and Microsoft with “Strong Buy” ratings, while Apple has a “Moderate Buy” rating
- Experts recommend holding tech stocks for the long-term despite current volatility
- Companies with less exposure to China manufacturing may recover faster from current market turbulence
Tech Stocks Navigate Tariff Turbulence: Wall Street Still Bullish on Magnificent 7
The Magnificent 7 tech stocks have experienced a rocky start to 2025, with all members in negative territory year-to-date amid tariff concerns and economic uncertainties. However, Wall Street analysts remain optimistic about the long-term prospects for many of these market leaders, particularly Amazon and Microsoft.
Apple (AAPL) has been hit hardest, down approximately 21% year-to-date due to its heavy reliance on Chinese manufacturing. The tech giant received welcome news when the Trump administration announced that smartphones, computers, and other tech devices would be exempt from reciprocal tariffs, which is expected to boost the stock in coming days.
Despite this relief, Apple’s vulnerability to trade tensions remains a concern. Experts estimate it would take years and billions of dollars to relocate production to the U.S., potentially leading to higher iPhone prices. The company has been diversifying its supply chain to countries like India to reduce Chinese dependence.
Wall Street Ratings Show Varying Confidence
Wall Street maintains a “Moderate Buy” consensus rating on Apple stock, with 17 Buys, 12 Holds, and 4 Sell recommendations. The average price target of $242.61 suggests 22.4% upside potential from current levels.
Amazon (AMZN) shares have declined about 16% so far this year. Investors worry about tariff impacts since many Amazon sellers source goods from China. Additionally, a potential economic slowdown could reduce enterprise spending, hurting the company’s AWS cloud computing division.
Despite these headwinds, analysts remain confident in Amazon’s long-term growth. Baird analyst Colin Sebastian, while reducing his price target to $215 from $260, maintained a Buy rating, citing Amazon’s “increasingly diversified business” and higher-margin revenue streams from AWS, advertising, and Prime subscriptions.
Amazon stock carries a “Strong Buy” consensus rating based on 46 Buys versus just one Hold recommendation. The average price target of $261.91 implies approximately 42% upside potential.
Microsoft Shows Resilience
Microsoft (MSFT) has shown greater resilience than most Magnificent 7 stocks, down only 8% year-to-date. Recent concerns arose when news broke that Microsoft was pausing some data center projects, raising questions about macroeconomic pressures on the business.
Nevertheless, analysts remain bullish on Microsoft’s prospects. Cantor Fitzgerald analyst Thomas Blakey reaffirmed a Buy rating, noting that industry checks indicated Microsoft is “the best-equipped vendor to withstand the current macro environment” thanks to its diverse business lines.
Wall Street has assigned a “Strong Buy” consensus rating to Microsoft stock, with 32 Buys and just three Holds. The average price target of $504.69 suggests about 30% upside potential.
Investment Strategy During Market Uncertainty
Investment professionals advise caution but not panic during this period of market volatility. Steve Sosnick, chief strategist at Interactive Brokers, emphasizes that investment decisions should align with individual financial goals and timelines, recommending keeping some assets in low-volatility cash equivalents.
For tech investments specifically, experts suggest focusing on companies with less exposure to Chinese manufacturing. Paul Stanley, chief investment officer at Granite Bay Wealth Management, points out that companies that have diversified manufacturing to countries like Vietnam and India “may have a quicker recovery.”
John Belton, portfolio manager at Gabelli Funds, believes Microsoft is positioned to weather economic storms well. He also sees defensive potential in software companies like ServiceNow and Intuit, which are leveraging AI to improve productivity.
As tech earnings season approaches, Robert Ruggirello, chief investment officer at Brave Eagle Wealth Management, expects company guidance to be more important than recent results. He suspects many management teams might suspend guidance given the current uncertainties.
Most experts advise against making major portfolio changes in reaction to short-term volatility. “If you’re already in tech, I think the only thing to do is hang on and ride it out,” says Stanley, expressing confidence that long-term investors will be rewarded for their patience.
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