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Silicon Valley’s embrace of Donald Trump’s 2024 presidential campaign is yielding unexpectedly sour returns, with tech valuations plummeting and IPOs facing delays.
Following President Trump’s announcement of sweeping tariffs, the Nasdaq experienced its most significant weekly downturn since the 2020 Covid pandemic, dropping by 10%. This market turbulence casts a shadow over the tech industry, which had largely supported Trump’s return to the White House.
“You couldn’t create a worse market and macro environment to go public,” stated Phil Haslett, co-founder of EquityZen, highlighting the current challenges for companies seeking to enter the public market.
Big Tech Takes a Hit
The market downturn has had a significant impact on major tech players.
- Apple: Suffered a 14% decline, its worst in five years.
- Tesla: Plunged 9.2%, bringing its year-to-date losses to over 40%. CEO Elon Musk was a major Trump supporter.
- Nvidia, Meta, and Amazon: All experienced double-digit percentage drops for the week. Amazon’s nine-week losing streak is its longest since 2008.
IPO Plans Put on Hold
Concerns over the economic impact of tariffs have rippled through the IPO market. Online lender Klarna and ticketing platform StubHub have postponed their IPOs, while fintech company Chime is also reportedly delaying its listing. CoreWeave, an AI infrastructure provider, saw volatile trading after its IPO, ultimately falling below its initial target range despite being the first venture-backed company to IPO for over a year.
“It appears that the IPO parade has been temporarily halted,” Klein told CNBC by email on Friday. “The current tariff situation has prompted these companies to pause and assess its impact.”
Tech Backlash and Economic Concerns
While some Trump supporters within the tech community, like Khosla Ventures’ Keith Rabois, defend the tariff policies, others are raising alarms. Allianz Chief Economic Advisor Mohamed El-Erian warns that these tariffs are increasing the risk of a U.S. recession.
Meanwhile, major tech companies have remained largely silent, avoiding direct comment on the potential impact of the tariffs. Microsoft CEO Satya Nadella, celebrating his company’s 50th anniversary, declined to comment directly on the issue during a televised interview. However, former CEO Steve Ballmer acknowledged that “disruption is very hard on people” and that, “as a Microsoft shareholder, this kind of thing is not good.”
What’s Next for Tech?
As market uncertainty persists, experts advise tech companies to prepare for further turbulence.
Lise Buyer, a seasoned IPO advisor, suggests that public company CEOs should reassure employees, while private companies should focus on preserving capital. The coming weeks will reveal whether Silicon Valley’s bet on Trump pays off or if it leads to further economic hardship for the tech sector.