From NVIDIA’s artificial intelligence (AI) dominance to Tesla’s self-driving ambitions, tech stocks are both soaring and stumbling in 2025. Recent US tariff exemptions for electronics have sparked rallies in stocks like Apple and TSMC, yet China’s retaliatory trade measures have rattled NVIDIA and Tesla.
With AI propelling valuations—NVIDIA’s market cap has hit USD 4 trillion—and supply chain risks looming, tech stocks are a thrilling yet turbulent opportunity for retail traders. Should you buy, sell, or hold in this dynamic environment? Let’s explore what’s driving tech stocks, the risks and forecasts, and how to trade them strategically.
What’s happening with tech stocks in 2025?
Tech stocks in 2025 are a tale of innovation and instability, fuelled by AI breakthroughs and disrupted by trade wars. The sector’s diversity—from chipmakers to electric vehicle (EV) pioneers—offers opportunities across the board. Here’s the current landscape:
AI-powered surge: AI is reshaping tech valuations. NVIDIA, now worth USD 4 trillion, leads with its AI chips, posting 50% revenue growth in Q1 2025. Microsoft’s AI-driven cloud services grew 20%, cementing its dominance. Tesla’s autonomous driving technology has boosted its EV appeal, despite volatile stock swings.
Tariff rollercoaster: Trump’s tariff exemptions for electronics (April 2025) lifted Apple by 5% and TSMC, a key chip supplier, by 7%, per VT Markets’ analysis. However, China’s retaliatory tariffs on US goods hit NVIDIA (-3%) and Tesla (-4%), reflecting supply chain fears.
Supply chain strains: China’s restrictions on rare earth exports threaten chipmakers like AMD and Intel, raising production costs. TSMC, while benefiting from tariff exemptions, faces geopolitical risks as US-China tensions simmer.
Mixed performance: The NASDAQ 100 index is up 15% year-to-date, but individual stocks vary: NVIDIA (+45%), Microsoft (+25%), Apple (+20%), TSMC (+18%), Tesla (+10%), and AMD (-5%). Asian tech markets, led by TSMC, are outperforming US tech.
Investor sentiment: Retail traders are increasingly optimistic about NVIDIA and Microsoft, fuelled by their dominant AI growth strategies and strong market positioning. Conversely, apprehension surrounds tariff-exposed stocks like AMD and Tesla, with concerns mounting over potential supply chain constraints and escalating trade policy uncertainties.
Risks and forecasts for tech stocks
Tech stocks are a rocket fuelled by AI but shaken by tariff storms. Understanding the risks and forecasts can help you decide whether to buy, sell, or hold.
Risks:
Overvaluation: Sky-high price-to-earnings (P/E) ratios—NVIDIA at 50x and Tesla at 60x, compared to the S&P 500’s 21x—signal correction risks if AI or EV growth falters. Analysts warn of a potential 10–15% NASDAQ drop.
Tariff volatility: China’s escalating tariffs or US policy reversals could disrupt supply chains, impacting Apple, TSMC, and Tesla. Analytics noted a 1.9% premarket dip in US tech stocks on tariff fears.
Geopolitical tensions: China’s rare earth export curbs threaten chip production for AMD, Intel, and NVIDIA. TSMC, despite its tariff relief, faces risks from US-China trade talks.
Economic pressures: Rising US Treasury yields (4.5%) and delayed Federal Reserve rate cuts could curb tech spending, hitting Microsoft and Tesla.
The tech sector in 2025 is driven bypowerful trends. NVIDIA and Tesla’s high valuations, with P/E ratios far above the S&P 500’s, raise concerns about potential corrections, urging traders to stay cautious.
Meanwhile, tariff exemptions lift companies like Apple and TSMC, and AI breakthroughs fuel growth for market leaders. These dynamics—AI potential, tariff shifts, and valuation risks—set the stage for a volatile yet exciting market. Here are the forecasts to guide your trading decisions.
Bullish outlook: AI and EV adoption could drive 20–30% gains for NVIDIA, Microsoft, Tesla, and TSMC by Q4 2025, fuelled by corporate AI budgets and Asian demand.
Bearish scenario: Tariff escalations and supply shortages might drag the NASDAQ 100 down 10% by mid-2025, with AMD and Intel most vulnerable.
Consensus view: Analysts, including Bloomberg, expect AI leaders (NVIDIA, Microsoft) and Asian tech (TSMC) to outperform, while chipmakers (AMD) and EV stocks (Tesla) face volatility.
These forecasts highlight the need for strategic trading to balance opportunity and risk.
Trading tech stocks during volatility
Trading tech stocks in 2025 is like navigating a stormy sea—exciting but demanding caution. Here are practical strategies to trade a diverse range of tech stocks and ETFs amid AI and tariff uncertainty, using VT Markets’ platform:
Choose your assets:
Individual stocks: Trade CFDs on AI leaders like NVIDIA and Microsoft for growth potential, tariff beneficiaries like Apple and TSMC for stability, or volatile EV innovators like Tesla for high-reward opportunities. AMD offers riskier bets tied to chip recovery.
ETFs: NASDAQ 100 CFDs provide diversified exposure, balancing risks across AI, chip, and EV stocks.
Pick proper strategies for volatility:
News-based trading: Capitalise on tariff news. For example, buy TSMC CFDs after exemption announcements, as its 7% rally showed, or sell Tesla CFDs when China escalates tariffs, using VT Markets’ real-time news alerts.
Safe-haven shift: During tariff-driven tech dips—like the 4% NASDAQ drop in March 2025—pivot to gold CFDs to protect capital.
Small position sizing: Limit trades to 1–2% of your capital to weather sudden drops, such as Tesla’s 4% fall on tariff news.
In times of uncertainty, the best approach is to stay informed, stay calm, and trade with a clear plan. Focus on quality tech assets, keep your position sizes small, and use strategies that respond to market news rather than emotions. Volatility can create opportunities—but only for those who manage risk and act with discipline.
Conclusion
Tech stocks in 2025 offer a thrilling ride, with AI leaders like NVIDIA, Microsoft, and Tesla soaring, tariff beneficiaries like Apple and TSMC gaining ground, and chipmakers like AMD facing headwinds. Yet risks—overvaluation, tariff volatility, and supply chain strains—demand caution.
By staying informed with VT Markets’ news feed, trading selectively with NASDAQ 100 ETFs, and limiting risks with small positions, you can seize opportunities in this turbulent market.
Ready to trade tech stocks in 2025? Open a live account with VT Markets to access low-spread CFDs and real-time insights. With the right tools, you can navigate tech’s turbulence and turn uncertainty into opportunity.
