When Donald Trump took office as the 47th president of the United States in January, many tech titans, including Elon Musk (TSLA), Jeff Bezos (AMZN), Sergey Brin (GOOG), and Mark Zuckerberg (META), were among the high-profile supporters at his inauguration. These industry leaders rallied behind Trump, hoping for a pro-business administration. However, fast forward to today, and the results tell a different story.
The same companies have collectively lost a staggering $204bn since Trump assumed office on January 20, according to Bloomberg, while semiconductor companies, which had previously ridden the wave of artificial intelligence (AI) optimism, have seen their share prices falter under his economic policies.
Let’s rewind to when Trump won the elections in November. Key players like Nvidia (NVDA), Broadcom (AVGO), Intel (INTC), Micron Technology (MU), ARM (ARM), ON Semiconductor (ON), Qualcomm (QCOM), Analog Devices (ADI), Texas Instruments (TXN) , and Marvell Technology (MRVL) all saw significant gains after Trump’s popular vote victory.
Investors expected a shift in policy away from the stringent AI technology restrictions implemented under the Biden administration, which had imposed an embargo on China’s access to advanced AI chips from companies like Nvidia, citing national security concerns.
However, since Trump took office, the market has begun to react negatively to his tariff-heavy economic agenda. Investor sentiment has soured in response to escalating trade tensions, fears of rising costs and concerns about a potential recession — a possibility that Trump himself has not ruled out. JPMorgan Chase (JPM) has since raised their risk of recession from 30% to 40%.
The past month has been particularly brutal for tech stocks, with many leading the charge in market downturns after having been the frontrunners in rallies throughout 2023 and 2024. The emergence of the Chinese AI startup DeepSeek, which claimed to create AI models at a fraction of the cost of its rivals, has added to investor uncertainty.
“Investors don’t know what’s going to happen around the corner,” Dan Ives, a Wedbush Securities analyst who covers the technology sector, told the LA Times. “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.”
Meanwhile, Trump’s criticism of tax breaks for semiconductor production in the US has further complicated the outlook. The $52bn (£40bn) bipartisan CHIPS Act, which aims to provide subsidies and incentives for domestic semiconductor manufacturing, is now facing significant opposition from the Trump administration.
In a recent congressional address, Trump called the CHIPS Act a “horrible, horrible thing”, urging lawmakers to repeal it and redirect the funds to other purposes. The CHIPS Act, passed in 2022 with strong bipartisan support, has already led to investments totalling roughly $400bn from companies like TSMC (TSM), Intel, and Samsung (005930.KS).
In another sign of the administration’s stance, the US Commerce Department laid off 40 workers assigned to the CHIPS programme, hinting potential cuts to key semiconductor initiatives. Trump has also threatened to levy tariffs on semiconductors that power consumer electronics.
So how has the share price of some of the biggest semiconductor companies have fared under Trump 2.0?
Nvidia: From bull market darling to facing pressure
Nvidia, the poster child of 2023’s and 2024’s bull market, has become the face of the recent pullback as Wall Street’s risk appetite weakens. The Santa Clara-based chipmaker has seen its shares drop 14% this year.
In January, Nvidia (NVDA) was hit hard after Chinese startup DeepSeek unveiled a cheaper AI model that used fewer computer chips. This announcement raised concerns among investors about softening demand for Nvidia’s high-end technology. During a quarterly earnings call in February, Nvidia CFO Colette Kress acknowledged the uncertainty of the impact of tariffs, noting that the company was still trying to "understand further what the US government’s plan is" regarding trade restrictions.
Despite exceeding consensus estimates for its fourth-quarter profit and revenue, and providing a strong sales outlook, Nvidia’s (NVDA) stock took an 8.5% hit after its earnings report. UBS (UBS) analyst Timothy Arcuri pointed to weaker gross profit margins as a potential concern for investors.
The chipmaker, which dominates the AI market with its graphics processing units (GPUs) powering the generative AI revolution, is also facing the prospect of tighter US export controls under Trump. As the president considers even more restrictions on technology sales to China, Nvidia's (NVDA) business, which generates roughly 15% of its revenue from the region, could take another hit.
The release of DeepSeek’s AI models earlier this year wiped $600bn from Nvidia’s (NVDA) market value, and the company’s Chinese business has already been shrinking. Sales to China, which once represented over 20% of Nvidia’s total revenue, have dropped, with the Chinese government now investigating Nvidia for potential antitrust violations in retaliation for US export controls.
Despite these challenges, Nvidia (NVDA) CEO Jensen Huang met with Trump at the White House in late January. While Huang doesn’t have the same close relationship with Trump as some other tech leaders, he has connections through figures like Musk, whom he has praised for his data centre supporting AI startup xAI.
TSMC: Amid tariffs and trade war concerns
Taiwan Semiconductor Manufacturing Company (TSMC) ·I-HWA CHENG via Getty Images
Taiwan Semiconductor Manufacturing Company (TSMC) (TSM) has seen its stock drop nearly 15% this year, driven by the broader market sell-off and fears over trade war tensions, tariffs, and increasing production costs.
While TSMC (TSM) announced a $100bn investment plan to build five new chip factories in the US as part of its partnership with the Trump administration, the company’s growth has been hindered by concerns over escalating tariffs and the geopolitical tension between the US and China.
Taiwan's president Lai Ching-te denied that the US had pressured TSMC (TSM) to make the investment, stating that the decision was a strategic move for the company’s future development.
“TSMC’s (TSM) decision is necessary for its future development. The government did not face pressure from the United States during TSMC’s investment process in the US,” said Lai.
Broadcom: Struggling to keep up
Broadcom's (AVGO) stock doubled in value last year, but it’s now down 17% year-to-date, despite posting strong earnings. The company has benefited from the growing AI semiconductor market, with CEO Hock Tan projecting continued strength in AI revenue.
Broadcom’s (AVGO) shares rose after the company exceeded Wall Street’s expectations with its second-quarter results, reporting an earnings-per-share (EPS) of $1.60 on revenue of $14.92bn.
However, Broadcom’s (AVGO) performance still lags behind Nvidia's (NVDA), whose GPUs dominate the AI market.
Intel: Struggling to regain its former glory
Intel at the 2024 Apsara Conference in Hangzhou, China ·NurPhoto via Getty Images
Intel (INTC), long a dominant force in semiconductor manufacturing, continues to struggle under Trump’s administration.
While the company has seen a 19% increase in shares since January, much of this growth can be attributed to the announcement of industry veteran Lip-Bu Tan as its new CEO.
"Having followed Tan's transformative impact on Cadence Design Systems (CDNS) during his 11-year tenure as CEO at that company, as well as many successful outcomes related to investments across the semiconductor universe, we believe that Tan is uniquely qualified to attempt a reboot of Intel (INTC)," Stifel analyst Ruben Roy said in a note.
Tan's appointment sent shares soaring by 15%, but Intel’s (INTC) challenges remain significant. The company has lost its manufacturing leadership to rivals like TSMC (TSM), which has made significant advancements in chip efficiency. Additionally, Intel missed the AI boom that helped Nvidia ascend to the position of the world’s most valuable chip company.
Intel was set to receive up to $8.5bn in funding from the CHIPS Act, a vital incentive for expanding its operations. However, with the future of the Act in jeopardy, Intel's (INTC) recovery may be further delayed. There have been reports that a consortium of companies, led by TSMC (TSM) and including Nvidia (NVDA) and Broadcom (AVGO), is in discussions to take over Intel’s manufacturing business.
AMD: Facing headwinds in the AI race
AMD semiconductor chip computer ·Rokas Tenys
Advanced Micro Devices (AMD), a competitor to Nvidia (NVDA) in the AI market, has also faced challenges under Trump’s administration.
Despite being a cost-effective alternative to Nvidia’s (NVDA) AI chips, AMD (AMD) has struggled to gain market share, with shares down 18% this year. Even with a strong earnings report in the fourth quarter, AMD’s stock price plummeted after it issued a cautious growth forecast for its data centre business, suggesting potential trouble ahead for its AI chip division.
"A regime change is taking place in the markets and what used to work is not going to work from here anywhere to the same degree," independent economist Peter Boockvar wrote in a note. "The stock market has a history of handing the baton over to other things and now seems to be one of those times."
A bleak future for AI stocks?
Despite the immediate struggles facing many semiconductor companies, the long-term prospects for AI remain positive.
A report from Fortune Business Insights forecasts that the AI market will grow from $233bn in 2024 to $1.77tn by 2032. This growth may offer long-term opportunities for investors who are willing to weather the volatility of the current tech market.
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