Jefferies Group, an American multinational independent investment bank, revised its growth projections for the tech industry following the tariff announcements. The investment bank emphasizes uncertainties that stem from the tariff hike and the volatile effect it would have on the trade market.
After the 125% tariff hike imposed by Trump’s administration on Chinese imports, China imposed a retaliatory tariff hike of 84% on U.S. imports. The resulting effects of trade tension between these two countries have brought about instability to the global market as it relies heavily on international supply chains.
Concerning the current fluctuating nature of the tariff policy put in place by the U.S. government followed by the 90-day tariff delay, Jefferies emphasizes that even with the pause, tariffs will remain higher than at the start of the year, which implies the only certainty is the uncertainty of tech leaders to figure out investments to prioritize.
According to Jefferies, the upside to the tariff hike lies in the opportunity it gives to companies to utilize the shifting landscape to adjust performance goals. The analysts said, ” Tariffs and related macroeconomic uncertainties are a free hall pass for companies to reset their guidance to more conservative figures, as investors are more likely to accept and invest in companies with achievable goals, which ultimately boosts stock price.”
The analysts cut their previous growth projections for 29 companies, which also included Meta, Amazon, Google, Apple, and Microsoft.
After the tariff announcement on the 2nd of April, Jefferies slashed Meta’s stock price target for the second time within ten days, from $725 to $600, a 17% reduction post-tariff. The first reduction on March 31st lowered Meta’s stock price projection from $810 to $725, a 10% reduction pre-tariff. The analysts also lowered the projected expectation of Meta’s earnings per share (EPS) in 2025 by 13%.
EPS is a portion of a company’s profit allocated to each outstanding share of common stock and serves as an important metric for investors to assess the profitability and financial health of the company. Meta is currently trading at $501 and has been on the low for the past week.
On March 31st, Microsoft’s stock price projection had been lowered from $550 to $500 by Jefferies. Following the announcement of the tariff hike, this growth prediction was revised by Jefferies and reduced by 5% to $475. Microsoft stocks are currently trading at $367.78.
Before the tariff hike, Jefferies had lowered Amazon’s stock price target from $275 to $250. Google’s stock price target was lowered from $235 to $200. Post-tariff hike, Jeffries has not released a price cut for these two companies but estimates a 1% and 2% cut for their EPS.
On April 8, analysts from Jeffries revised the stock price target of Apple from $202.33 to $167. Days after the tariff announcements, Apple suffered a 25% decline in stock prices due to the uncertainty the effect of the tariff will have on the company and prices of its products. Apple stocks are currently trading at $196.94, which contradicts Jefferies’ negative prediction.
Jefferies revised tech growth projections bring light to the challenges faced by tech companies amid the tariff trade war. Overall, the investment bank encourages investors and companies to remain vigilant and ready to adapt to the evolving changes in the trade market.
