Bloomberg Tech China Fights Tariffs with Tariffs
Feb 4, 2025
Fiona Sincottis, a senior analyst at Citi Index Financial Markets, shares her insights on the escalating trade tensions between the U.S. and China as the latter imposes retaliatory tariffs. She discusses the impact of these tariffs on major tech firms like Alphabet and highlights the remarkable performance of Palantir due to AI growth. The conversation also covers Spotify's first-ever annual profit and investor sentiment shifts amid generative AI developments, emphasizing the evolving landscape of tech stocks.
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China's Retaliatory Tariffs
- China retaliates against potential US tariffs with its own, including a probe into Alphabet/Google.
- This symbolic move targets Google's Android presence in China, despite Google Search being absent since 2010.
Investor Optimism on AI
- Investors are optimistic about AI's potential for returns and new revenue streams, keeping stocks at record levels.
- The prospect of future AI cost reductions is also viewed positively by AI users.
Software vs. Hardware in Geopolitical Tensions
- Geopolitical tensions and tariffs could disproportionately impact hardware companies compared to software firms.
- Chip stock outlooks are complicated by export limitations and tariffs, while software firms may have more freedom.