According to a Wall Street analyst, a Democratic sweep in the November election could pose an insurmountable threat to Big Tech.
Alphabet Inc., Amazon Inc., Apple Inc., and Facebook Inc. took the S&P 500 to new highs following a 34% plunge that occurred during the onset of the COVID-19 pandemic, but a Biden presidency and democratic control of the House and Senate could derail the momentum with a single blow.
The so-called blue wave “would make a formidable force after antitrust law changes with possible radar breaks,”
TIGHT COMPETITIONS MORE IMPORTANT FOR STOCKS THAN PRESIDENCY: ANALYSTS
A Democrat-led House subcommittee proposed dismantling Big Tech due to unfair trading practices in a report released Tuesday. In such a scenario, Alphabet would not be able to own both the Google search engine and YouTube, while Amazon would be prohibited from selling its own private label products.
While Republicans see many of their Democratic counterparts’ proposals as “non-starters,” they have their eyes on companies for a different reason.
The House Judicial Commission released a report later Tuesday calling for Big Tech to be held accountable for a “consistent level of bias” and suggested changing Section 230 of the Communications Decency Act, which provides companies like Facebook and Twitter protection against party content.
As long as both houses of Congress and the presidency are not controlled by a single party, Ives does not see Congress agree on the legislation, setting the stage for the “mind blowing” rally in tech stocks to continue through the end of the year as fundamentals and trajectories of growth take hold.
One such growth trajectory stems from the persistent restrictions linked to the pandemic, with executives speculating on long-term remote work as a second year of COVID-19 approaches.
CLICK HERE TO READ MORE ABOUT FOX BUSINESS
Large-cap technology stocks have been “revalued as utilities because they have become essential,” said David Rosenberg, chief economist and strategist at Toronto-based Rosenberg Research. “The longer we have the work-at-home theme, the higher the ratings these companies will receive.”