In a stark warning that has rattled investors across the financial world, Dan Ives, a prominent tech analyst at Wedbush Securities and one of Wall Street’s most steadfast tech bulls, has declared that former President Donald Trump’s latest tariff plans could mark the beginning of the end for the artificial intelligence (AI) boom that has driven markets to historic highs over the past three years.
Following one of the worst trading days in the last five years, Ives expressed deep concerns over the economic and market consequences of the Trump administration’s proposed tariff hikes. The newly proposed tariffs, which raise China’s tariff rate to 54%, threaten to severely disrupt global supply chains, particularly in the technology sector — the very industry that has been the backbone of Wall Street’s gains in the AI era.
A Dangerous Gamble With the Economy
According to Ives, these tariffs could act as a “shut-off valve” for crucial overseas tech components and supplies entering the U.S. market. The result? A dramatic spike in consumer electronics prices — potentially as high as 50% — and a significant 15% decline in U.S. tech earnings.
“The concept of taking the US back to the 1980s ‘manufacturing days’ with these tariffs is a bad science experiment,” Ives wrote. “In the process, it will cause an economic Armageddon in our view and crush the tech trade, AI revolution theme, and the overall industry.”
Wedbush analysts criticized the methodology behind Trump’s tariff strategy, calling it “convoluted” and suggesting it was based on misleading calculations. In a particularly biting comment, Ives noted that if a high school student presented this tariff logic in a basic economics class, “the teacher would laugh and say sit down and work on the assignment.”
Market Meltdown Reflects Tariff Fears
Markets are already reacting sharply to the news. The Roundhill Magnificent Seven ETF — which tracks major AI-related tech giants — plunged 6.87% on Thursday and fell another 4% on Friday morning. Year-to-date, the fund is now down over 20%, reflecting growing investor fears that the trade war could undermine the entire tech growth narrative.
Wedbush warned that these tariffs, if enacted without revisions or negotiations, could lead the U.S. into a period of stagflation — a combination of slow economic growth and high inflation — or even a full-blown recession.
“The economic pain brought by these tariffs is hard to describe and could essentially take the U.S. tech industry back a decade while China steamrolls ahead,” the firm warned in a scathing note.
A Rare Bearish Turn From a Longtime Optimist
Ives’ grim outlook is particularly notable given his usually optimistic stance. For years, he has been one of the most vocal proponents of the AI revolution, predicting a $1 trillion wave of investment in the space. But this latest turn of events, he warns, could derail that progress unless swift and strategic tariff negotiations are initiated.
“The supply chain will become a Rubik’s Cube, rivaling the chaos we saw during the COVID-19 era,” Ives said.
Outlook: Can AI Weather the Storm?
While some still hold out hope that the tariffs may be revised or negotiated before causing long-term damage, the current trajectory presents serious risks to the global tech ecosystem. The industry’s reliance on international components and the interconnected nature of global trade make it particularly vulnerable to protectionist policies.
For traders and investors, the message is clear: the AI trade, once considered untouchable, is now under serious threat. With volatility returning to the markets and geopolitical tensions rising, market participants must prepare for a potentially turbulent period ahead.
At IX Broker, we continue to monitor these developments closely to provide our clients with up-to-date insights and analysis on how global economic policy shifts may impact trading strategies in the months to come.
