Jefferies analysts said that tariffs could allow companies to reset their financial guidance.
Tariffs and macroeconomic uncertainties impact tech companies like Meta, Microsoft, and Google.
Global stock markets suffered significant losses last week due to the new tariffs.
Market-rattling tariffs offer one upside: Companies can use the shifting financial landscape to adjust their performance goals, wrote analysts from Jefferies.
In a note on Sunday, Jefferies analysts said that tariffs and related macroeconomic uncertainties are a “free hall pass” for companies to reset their guidance to more conservative figures.
“Lower estimates that are more achievable tend to improve investor sentiment and, ultimately, lead to better share performance,” said Jefferies analysts led by Brent Thill.
The analysts cut their forecasts for 29 tech companies, including Meta, Microsoft, Google, and Amazon.
The analysts slashed Meta’s stock price target for the second time in 10 days, this time from $725 to $600, a 17% cut. Meta is trading at $504, down 10% in the last five days.
The analysts also slashed Meta’s earnings per share for 2025 by 13%.
Price targets are estimates of what an analyst thinks a stock is worth. Earnings per share is an important metric for investors because it assesses a company’s profitability and financial health.
Jefferies cut Microsoft’s price target 5%, from $500 to $475. Microsoft is trading at $360, down 3.5% in the last five days.
The analysts cut 2025 EPS estimates for Google and Amazon by 2% and 1%, respectively, but did not change their prices targets.
Meta and Amazon get a lot of business from Chinese advertisers who are trying to reach American shoppers. Tariffs on Chinese goods may lead them to pause US advertising, marketing experts told Business Insider.
For tech companies, the second quarter, which kicked off in April, “likely represents a peak period of uncertainty, followed by a potentially better 2H/Q4 after expectations are reset and there is more clarity around macro and tariff-related risks,” the analysts wrote.
The Jefferies analysts are not the only ones adjusting expectations. Businesses from Target to Best Buy to Ferrari have said that they will raise prices in response to increased import duties.
Last week, President Donald Trump announced a spree of retaliatory tariffs on nearly every country. These included major manufacturing and raw material hubs, including a 34% tariff on China, 46% tariff on Vietnam, 26% on India, and 32% on Indonesia. On Friday, China pushed back with a 34% tariff on all US imports from April 10.
