Investors recently received favorable news regarding tariffs affecting the technology sector. The persistent threat of an extensive trade war and fluctuating tariff policies have caused significant volatility in the stock market over recent weeks. This ongoing volatility, marked by a corrective trend, has been somewhat alleviated by periodic positive developments that have sparked optimism among investors, leading to stock price increases from previous lows. Over the past weekend, encouraging news initiated a broad-based market rally at the week’s start.
Against this backdrop, Palantir Technologies, a specialist in artificial intelligence (AI), saw its stock rise by 4.6%. Similarly, semiconductor supplier Micron Technology experienced a 2.6% increase, while iPhone manufacturer Apple rallied with a 2.4% gain as of 11:52 a.m. ET on Monday.
A memo issued by the U.S. Customs and Border Protection late on Friday granted a temporary exclusion from the proposed 145% tariffs on certain electronics imported from China. These exclusions applied to smartphones, semiconductors, and chipmaking equipment. This decision appeared to signal positive progress, as investors had been concerned that an extended trade war could impede AI adoption.
In response to this development, Wedbush analyst Dan Ives remarked that the action taken by the White House alleviated dire concerns and anticipated a rally in tech stocks as investors could breathe easier. However, this certainty was short-lived, as the Trump administration seemed to reconsider. During an interview over the weekend, Secretary of Commerce Howard Lutnick stated that the exemption was temporary, and tariffs on electronic products, including smartphones and computers, would be implemented in the coming months.
President Trump sought to clarify the situation on Monday morning, stating that these products would not be exempted but would instead be categorized into a different “Tariff ‘bucket.'”
In additional news, the North Atlantic Treaty Organization (NATO) announced the finalization of its acquisition of Palantir’s Maven Smart System, which is intended to be deployed at the NATO Allied Command Operations military headquarters. The acquisition was completed on March 25, as noted in NATO’s press release. Supreme Headquarters Allied Powers Europe (SHAPE) and NATO plan to use Palantir’s system to introduce a variety of modern, emerging AI models, and simulations.
While some investors were concerned that Palantir’s future performance might suffer due to potential budget cuts by the U.S. Department of Defense, the drive for more efficient and effective military capabilities by the U.S. and its allies suggests that Palantir could benefit from modernization efforts as outdated systems are replaced with advanced upgrades.
Despite being at the forefront of the AI revolution for a few years, it is widely believed that the integration of AI technology is still in its early stages. Each of the three companies mentioned is well-positioned to benefit from these emerging trends:
– Palantir’s Artificial Intelligence Platform (AIP) is experiencing strong adoption, leading to accelerated revenue and profit growth.
– Micron is a key supplier of memory (DRAM) and storage (NAND) chips, essential for AI processing.
– Apple is integrating its Apple Intelligence across 2.35 billion devices, thereby incorporating AI into a wide range of its products and services.
Some investors are wary that an ongoing trade war and extensive tariffs could hinder AI adoption by significantly raising the cost of the necessary semiconductors and related products. Nevertheless, continuous innovation in the industry is expected to further drive AI adoption, which will likely benefit the three companies.
From a valuation standpoint, Palantir’s stock remains high-priced at 165 times forward earnings, whereas Apple and Micron are more attractively valued, trading at 28 times and 10 times forward earnings, respectively.
