Microsoft's Cloud Ambitions Halted by Trade War Uncertainty, Analyst Warns of Revenue Slump

Microsoft at Heart of Tariff Armageddon: Analyst Flags Deal Delays, Expects Fallout to Hit Up to $100 Billion in Revenue

A leading analyst has sounded the alarm on the potential devastating impact of tariffs on Microsoft's (MSFT) business, warning that the tech giant may be at the heart of the tariff armageddon. In a research note, Wedbush Securities analyst, Dan Ives, highlighted the company's significant exposure to tariffs on electronics and other goods, which could lead to a substantial hit to its revenue.

Ives estimates that if tariffs are implemented, Microsoft's revenue could fall by up to $100 billion in the next two years. The analyst notes that Microsoft's business is heavily reliant on the global supply chain, and any disruption caused by tariffs could have a ripple effect on its operations.

The analyst's warning comes as the U.S.-China trade tensions continue to escalate, with both sides imposing tariffs on each other's goods. Microsoft's reliance on China for components and manufacturing makes it particularly vulnerable to the trade war.

Ives also flags potential deal delays as a major concern, citing the company's ongoing efforts to close several major deals, including its $10 billion deal with the U.S. Department of Defense. Any delays or cancellations of these deals could have a significant impact on Microsoft's revenue and profitability.

The analyst's note highlights the potential risks facing Microsoft, including:

• Tariffs on electronics and other goods, which could lead to a revenue decline of up to $100 billion over the next two years
• Deal delays and cancellations, which could impact revenue and profitability
• Supply chain disruptions, which could affect Microsoft's ability to deliver products and services to its customers

Ives has a Neutral rating on Microsoft, with a target price of $180. He notes that the company's strong cash position and diversification efforts could help mitigate some of the risks, but ultimately, the analyst believes that the company's reliance on the global supply chain makes it vulnerable to the tariff armageddon.