Microsoft At Heart Of 'Tariff Armageddon': Analyst Flags Deal Delays, Expects Fallout To Hit Upcoming Earnings Season

Wedbush analyst Daniel Ives slammed the ongoing “tariff game of poker” for fueling significant near-term uncertainty among tech companies, including Microsoft Corporation MSFT.

What Happened: In a Thursday research note, Ives reiterated the Outperform rating on Microsoft, lowering the price forecast to $475 from $550.

Ives explained that despite President Donald Trump‘s 90-day pause on tariffs for certain countries, companies that are reliant on Chinese supply chains or cost inputs are still vulnerable.

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“Yesterday was a relief for the world as the tariff 90 day pause for many countries took the US economy off the cliff heading towards a clear recession… but thinking this tariff issue is now done is the wrong view in our opinion as the real enterprise spending impact and China tariff implementation will be seen during earnings season over the coming month,” he added.

Why It Matters: The real impact on enterprise spending and implementing China-related tariffs will become clear during the upcoming earnings season.

Ives estimates that around 10% to 15%—possibly a conservative figure—of U.S. cloud and AI initiatives currently being tracked could be delayed or slowed during this period of heightened uncertainty.

Microsoft is expected to be “front and center” of this economic climate, he adds.

“We have talked over the last week that unleashing this tariff Armageddon was always a negotiation tactic for Trump but the impacts and gamble to the real economy are a snowball that once it starts rolling downhill it cannot be just stopped,” Ives wrote.

Investors will witness the fallout as tech earnings season kicks off in the coming weeks, he expects.

What’s Next: Ives expects Microsoft’s cloud business and Office 365/Windows ecosystem to “spur growth and margins” in 2026.

Ives added that investors are likely to look beyond the June results, viewing this quarter as a mulligan for the Redmond, California-based company and the broader tech sector.

The current tariff-driven uncertainty in the market is also expected to “push out” deals and projects into the September and December quarters, he adds.

The analyst lowered the FY25 Pro-forma EPS estimate to $12.89 from $13.19. For FY26, the analyst lowered Pro-forma EPS estimate to $14.40 from $15.09.

Price Action: Price Action: MSFT shares are trading lower by 4.09% to $374.77 at last check Thursday.

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