“It was viewed by investors pre-Elections in early November that Chinese tech stalwarts such as Baidu (BIDU) - Get Report, Tencent (TCEHY) , Alibaba, JD.com (JD) - Get Report and others were positioned well to gain more investor mind-share, given the complex global backdrop,” Ives wrote in a commentary Monday. “Fast forward to today and the Ant Financial IPO delay and further regulatory crackdown is a major black eye for the Chinese tech sector and thus cast a shadow over the space, with Alibaba front and center.”
Chinese regulators are investigating Alibaba on antitrust grounds and told Ant to narrow its focus to payments. Alibaba owns 33% of Ant, the world’s largest financial technology company.
That means “dynamics will yet again bode well for U.S. tech stocks as the favorable backdrop creates a nirvana set-up for FAANG [Facebook (FB) - Get Report, Amazon (AMZN) - Get Report, Apple (AAPL) - Get Report, Netflix (NFLX) - Get Report and Google (Alphabet) (GOOGL) - Get Report] names and the overall U.S. tech sector into 2021,” Ives said.
With Joe Biden as president and a likely Republican-controlled Senate, Ives also noted that “the gridlock situation is bullish for the tech sector, as now it appears any potential antitrust legislative changes/fixes against Big Tech have essentially hit a brick wall."
And on the China front, “the U.S./China decoupling path could be altered with Biden in the White House,” he said. “The U.S./China Cold Tech war under a Biden White House likely takes a much softer tone going forward.” That would particularly help Apple, Cisco (CSCO) - Get Report, and semiconductor companies, Ives said.