Tech Sector Entering A Period Of 'Mass Uncertainty' Amid Tariffs And Upcoming Earnings Season, Says Dan Ives: 'The Damage Is Real'

The technology sector is preparing for a period of uncertainty and volatility due to recent tariffs and the upcoming earnings season, according to Wedbush analyst Dan Ives.

What Happened: Despite hopes for stability following a pause in tariffs last year, the tech industry is facing a less certain reality. Large-scale purchases may see significant downsizing or pauses, contributing to the sector’s volatility, said Ives.

The tech analyst attributes this turbulence to recent tariffs, which have reached as high as 125% on China, significantly impacting the tech industry. While he stated that the pause on tariffs is a good sign, there is still a lot of uncertainty. “There is a framework but the reality is there is mass uncertainty.”

These tariffs have led to a dramatic pullback in capital expenditure (CapEx), especially on data centers. Companies such as Apple Inc. AAPL, Microsoft MSFT, Alphabet GOOGL GOOG, and Amazon.com, Inc. AMZN have all felt the impact, with spending plans stalled as they navigate this new reality.

As earnings season approaches, Dan anticipates further turbulence and predicts earnings cuts of about 10% across internet and big tech. The tech world is still assessing the full extent of the damage, with the potential for a U.S.-China deal looming large.

“​Street numbers now you are assuming across the board you will see earning cuts to about 10% across internet and big tech.,” he predicted.

The Wedbush Analyst stated that the June quarter would be very soft and investors are looking ahead to any sign of a China deal and a de-escalation.

SEE ALSO: Jim Cramer Reminds Investors ‘Nobody Ever Made A Dime Panicking’ After Market Rally Amid Tariff Pause

Why It Matters: The 90-day tariff pause, announced by President Donald Trump, was initially seen as a relief for the stock market. However, despite the rally in markets, analysts warned of a “key obstacle” still on the table.

Ives’ concerns about pauses in data center capex are relevant as reports suggest that Microsoft has recently shelved a $1 billion data center investment in Ohio.

Trump’s more lenient approach to his trade agenda led to a significant rally in the stock market. However, portfolio managers and analysts were not fully convinced. They believed that the escalating trade war and a worrying selloff in the U.S. government bond market had caused permanent damage.

For tech companies, the road ahead remains volatile. The combination of paused projects, tariff-driven cost increases, and cautious guidance paints a challenging picture for the industry. As Dan Ives put it, “The damage is real.”