Amid tariffs, bubbles, and geopolitics, technology holds firm. What appears to be a collapse is perhaps merely a realignment of global economic power.
When market fear is more media-driven than fundamental. On everyone’s lips, and in every newspaper, fear of a trade war returns, and markets tumble. Where is the panic spilling over? Trivial: on AI, which many analysts have considered "in a bubble" for months.
Bubble, bubble, bubble...but what does "bubble" really mean? And, above all, is it right to think that a round of tariffs between the USA and China could actually cause it to explode? Let’s try to reason about it, reviewing a few economic basics, before getting swept away, as too often happens, by the fear narrative.
An optimistic (but not naive) assumption
Let’s try to start from an optimistic assumption, not necessarily realistic, but useful for reasoning: political tension will not translate into structural economic damage. That alone changes everything. We’re not talking about the beginning of an irreversible fracture, but rather a temporary rearrangement of the global supply chain.
Let’s ask ourselves: what happens if Trump continues with tariffs and Beijing responds with restrictions on rare earths? In hindsight, no one really gains. Mutual dependence on chips and AI makes lasting decoupling impossible.
The United States continues to dominate the advanced semiconductor sector, while China remains crucial in the supply of critical raw materials (such as gallium and germanium) and in the assembly and testing phase. A prolonged disruption would affect both sides.
In other words, there is no economic incentive for disruption, but rather for restructuring.
Technology as a Structural Driver
For at least two decades, technology has been the main driver of global growth. From software to data centers, from semiconductors to artificial intelligence, the tech sector has demonstrated a unique ability to absorb geopolitical shocks and reallocate capital efficiently.
Consider the pandemic: supply chains disrupted, the global economy in recession, but the Nasdaq doubled in value in just a few months. The reason is clear: technology is perceived as a modern-day safe haven.
Not a "safe haven" like gold or the Swiss franc, but a "functional" safe haven: an essential growth infrastructure for any advanced economy.
The paradox of tariffs: a political, not economic, response
Imposing tariffs, like Trump’s after the expiration of the trade truce, is not an economic policy measure in the strict sense, but a political move. It serves to negotiate from a position of strength, not to harm the adversary.
And indeed, it makes sense: Trump couldn’t remain passive after China’s threat to limit rare earth exports. It would have been a contradiction to American economic doctrine based on managed strategic competition.
On the other hand, Beijing has no interest in closing its doors either. Its giants—Huawei, Tencent, and Baidu—depend on Western technologies and semiconductors. Washington, for its part, continues to import essential components and metals from Chinese suppliers. It’s a mutual dependence, a modern form of balance of power.
The AI "bubble" and the error of perspective
We come to the hottest point: the so-called artificial intelligence bubble. Many observers argue that market multiples, such as the aggregate P/E ratio for the tech sector, are unsustainable. True, but only half true.
The sector’s profitability remains high, as do cash flows. EPS (earnings per share) estimates for the S&P 500 in 2026 indicate expected growth of more than 14%.
And note: this figure has already been revised downward by more than 10 points from its peaks at the beginning of the year.
This means that, despite volatile sentiment, the market continues to price in a long-term growth trend. The problem, if anything, is the price: high multiples on earnings that remain strong.
However, if the price declines, due to tariffs, tensions, or profit-taking, but earnings remain robust, we could be facing natural P/E compression, not a bursting bubble..
Stocks to Watch Amid the Apparent Chaos
In such a context, the stocks to monitor remain the usual "barometers" of global AI:
- Nvidia (NVDA), the backbone of modern AI;
- Microsoft (MSFT), the hub of cloud growth and a preferred partner of OpenAI;
- Palantir (PLTR), the bridge between data intelligence and national security;
- Meta (META), Alphabet (GOOG, GOOGL), and Amazon (AMZN) are the "winners" poised to capture the productivity expansion associated with cognitive automation.
These companies have solid fundamentals, enormous cash positions, and competitive advantages that are hard to match..
This is not a call to "buy the dip"
Knowing that the situation isn’t as bad as it seems doesn’t mean adopting a blind "buy the dip" approach. Every investor will, rightfully, have their own entry and exit strategies.
What matters is understanding that the market often tends to overestimate threats and underestimate resilience. Tariffs don’t represent the end of technological globalization, but rather its adaptation to new balances of power.
Looking beyond the headline and into the underlying logic of the market is the best way to avoid being be fooled by background noise.
Original article published on Money.it Italy 2025-10-14 19:12:00. Original title: Perché non devi avere paura dei dazi se investi
