When President Trump returned to the White House, tech executives from Apple, OpenAI, Oracle and other companies pledged to create thousands of jobs, fuel innovation and invest billions of dollars in the United States.
But technology stocks have been on a bumpy ride this year as trade disputes and the future of artificial intelligence have stoked economic uncertainty.
Trump has gone back and forth about imposing tariffs on imports from Canada, Mexico and China, which tech giants rely on to produce laptops, phones and other gadgets.
And he’s threatened to levy tariffs on semiconductors that power consumer electronics while criticizing a federal program championed by his predecessor, Joe Biden, that has funded domestic semiconductor manufacturing.
The uneasiness among investors returned this week when some of the world’s most valuable companies, such as Apple, Nvidia and Tesla, shed billions of dollars from their market value after their share prices plunged on Monday.
The losses came after Trump warned in an interview on Fox News over the weekend that “there’s a period of transition” in the coming year and didn’t rule out a recession. Commerce Secretary Howard Lutnick then told NBC News, “There’s going to be no recession in America.”
“Investors don’t know what’s going to happen around the corner,” said Dan Ives, a Wedbush Securities analyst who covers the technology sector. “It’s been an unsettling time, and that’s why after a massive bull market, you’re seeing, especially major tech stocks, go through just a disaster period to start the year.”
As of Wednesday, the NASDAQ-100 technology sector was down roughly 6% since January and the S&P 500 information tech sector had dropped nearly 10% this year (compared to a 5% drop for the market as a whole).
Various reasons explain the market turbulence, analysts say, pointing to investor worries about tariffs, investment levels in AI and a pullback in consumer spending.
Nvidia’s shares rose 6% on Wednesday but are still down 16% this year; it closed at $115.74 a share. The Santa Clara-based tech company, which makes computer chips, was hit hard in January after Chinese startup DeepSeek announced it had built a cheaper AI model with fewer computer chips.
Nvidia has been bracing for the impact of Trump’s trade policies. During its quarterly earnings call in February, Nvidia Chief Financial Officer Colette Kress said the effect of tariffs are “an unknown” until the company can “understand further what the U.S. government’s plan is.”
Alphabet, Google’s parent company, also has seen its stock drop nearly 11% to $169 per share since January. The search giant faces a potential breakup after a federal judge ruled last year that Mountain View, Ca.-based Google illegally maintained a monopoly in online search.
Google plans to appeal, but the Department of Justice under the Trump administration reiterated a proposal to force the company to sell its Chrome browser to restore more competition.
The regulatory scrutiny is happening as Google faces questions about whether AI, which can quickly generate summaries of information, will “seriously impair their core search business,” said Jeff Wlodarczak, a principal and senior analyst at Pivotal Research Group.
As they ramp up their AI investments, tech companies also are spending more than analysts anticipated on capital expenditures such as data centers and servers. Alphabet said it plans to invest $75 billion in capital expenditures in 2025.
“It doesn’t mean AI is not going to be successful, but there’s a concern about what kind of return they’re going to get in all this investment,” Wlodarczak said.
Meanwhile, Meta’s stock has dropped more than 14% in the past month, but the company’s share price is still up since January. On Wednesday, Meta’s stock closed at $619.56 per share.
The company, which owns Facebook, Instagram and WhatsApp, still dominates in social media; getting more people to use Meta’s AI tools could help it gather more valuable data on the more than 3 billion people who use its platforms daily.
In an earnings call in late January, Meta said it was keeping an eye on “legal and regulatory headwinds” in the European Union and the U.S. that could impact its financial results.
Amid rising tensions between the U.S. and its trading partners, tech companies could find ways to get exemptions from Trump’s tariffs, Ives said.
“I think a lot of this is really just to bring these countries to the table in negotiation,” he said. “But the damage has been done to the market. It’s taken a lot of momentum out and it’s caused a lot of nervousness for investors.”
