A leading technology strategist says AI trade fears surrounding China-related trade tensions are misplaced.
In a new CNBC interview, Patrick Moorhead, the CEO and chief analyst at Moor Insights & Strategy, says the recent sell-off in technology shares following Trump’s announcement of additional tariffs against China reflects emotion more than logic.
He believes investors are reacting to headlines rather than fundamentals, particularly after months of soaring valuations across the AI ecosystem.
“I think this is a complete overreaction. Let’s take Nvidia as an example. Nvidia zeroed out all revenue for China going forward. They just zeroed it out in all of their forecasts. But this is a left-brain emotional reaction. I mean, listen, I understand companies like Apple who quite frankly do most of their manufacturing in China and a little bit in India.
But Nvidia and even AMD in particular make absolutely no sense.”
But Moorhead warns that his stance will change if America and Taiwan engage in a trade war.
“I would understand if we were going into a true trade war with Taiwan. Now, that would be very, very difficult, where most of the leading-edge chips that are used in hyperscalers are all made in Taiwan.
But we’re talking about China. Sure, they do manufacture smartphones and PCs, but not leading-edge chips.”
Moor Insights & Strategy is a global technology analysis and advisory firm specializing in semiconductors, artificial intelligence, and enterprise computing.
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