Trump's Impact on US Tech Spending: A Windfall for IT Services?

Motilal Oswal Financial Services analyzes the potential positive impact of Donald Trump's election win on the US IT services sector. Highlighting the anticipated benefits from corporate tax cuts, the analysis suggests that tech spending will rise in 2026/2027. However, a trade war may offset these gains.

The election of Donald Trump could signal a promising turnaround for tech spending cycles in the United States, as emphasized by a report from Motilal Oswal Financial Services. After years of sluggish growth, the IT services industry is poised to benefit from corporate tax cuts and a business-friendly administration.

While IT service vendors may face challenges from trade tensions, the report notes that the industry has largely adapted to shocks such as changes in immigration policies. With hiring strategies shifting away from reliance on H-1B visas, companies have increased their local hiring efforts.

Despite the complexity of immigration policies and trade wars, the expected decline in interest rates under Trump's administration is set to boost technology expenditure. The analysis outlines how industries like BFSI, IT, software, and energy are positioned to gain from these fiscal policies.

(With inputs from agencies.)