A quarter to forget. President Donald Trump’s re-election initially seemed to benefit tech companies. However, the current administration’s decision to initiate a global trade war has dramatically changed the outlook. As a result, major tech companies have registered poor performance in 2025 so far.
Apple is the hardest hit. The situation was already troubling, but the recent U.S. announcement of a 104% tariff on Chinese imports had an immediate impact on Apple. As a result, Apple briefly lost its title as the world’s largest private company, with Microsoft regaining that status. The ongoing fluctuations in the market and the measures taken by several countries suggest a future filled with volatility in market caps.
The “Not-So-Magnificent Seven.” Apple, Microsoft, Amazon, Alphabet, Meta, Nvidia, and Tesla make up the group often referred to as the “Magnificent Seven.” These tech giants rank among the 10 most valuable companies globally. All have been particularly affected by tariffs. However, some companies are better equipped to navigate this crisis than others.
Hardware penalizes. One repercussion of Trump’s tariffs is an increase in production costs, which particularly impacts companies heavily involved in hardware manufacturing. This is a significant disadvantage for Apple, which manufactures in Asian countries where tariffs are notably high. Other companies face similar challenges. For instance, Nvidia relies on TSMC in Taiwan for much of its GPU production, while Tesla has manufacturing partnerships in China and Mexico.
Logistics chains. Tariffs also create obstacles for companies reliant on logistics chains. Geopolitical tensions may worsen the situation, potentially leading to delays in production and the supply of materials and components. Again, a prime example is Apple. While globalization initially benefited the company, the current landscape poses new challenges for its strategy. Similarly, Amazon faces difficulties due to its vast network of physical products, many of which are imported from China.
Microsoft is in a better position. The company is less reliant on hardware because its core offerings, such as Azure, Office 365, and its Xbox video game platform, don’t depend heavily on it. This revenue diversification and focus on cloud services enhance Microsoft’s competitive stance. In fact, it’s experienced one of the smallest declines in market cap in recent months, at just 17.7%. Amazon also capitalizes on the strength of its cloud infrastructure through AWS.
What about the cloud? Although Microsoft and Amazon’s business models are less reliant on hardware, their infrastructures and data centers still depend on hardware components that will likely increase in cost. This could ultimately impact their businesses. A similar situation applies to Google, which is primarily focused on cloud services and has a significant presence not only in the U.S. but also in Europe, the Middle East and Africa.
A looming threat of tariffs on digital services. One potential retaliatory measure is the European Union’s proposed tariffs on digital services. This area represents a significant export for the U.S., primarily produced by major tech companies like Alphabet and Meta. Companies such as Apple, Microsoft, and Amazon could also be affected, although to a lesser extent. Additionally, the outlook for AI investment is complex, suggesting that Big Tech may face further challenges in this sector as well.
Image | Emanuel Ekström
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