The Nasdaq composite index continued trending upward today as President-elect Donald Trump named another prominent Silicon Valley insider to a White House role. David Sacks is the former CEO of the social networking platform Yammer. He is best known for his early role as COO of PayPal (PYPL) , where he worked with Elon Musk.
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Trump has announced that Sacks, a venture capitalist, will serve as his ‘AI and cryptocurrency czar.’ An outspoken supporter of Trump, Sacks hosted a fundraiser for him and praised him multiple times during the recent election cycle. Now, he stands to have tremendous influence over the tech industry while Musk is poised to begin heading the new Department of Government Efficiency (DOGE).
Sacks is being appointed to a high-powered position at a pivotal time for the tech sector. Trump’s appointment of multiple industry insiders to the White House stands to impact many companies significantly.
What Trump’s New Pick Means for Tech
Why is Trump choosing Sacks for this position important? The short answer is that it likely means significantly less regulation for the industry. A Silicon Valley insider and Trump loyalist will likely champion policies favoring big tech companies by eliminating the rules restricting what they can do.
Trump has already promised to ease regulations on crypto, an area of tech that many policy experts feel needs more regulation. But since Trump’s victory, Bitcoin (~BTCUSD) prices have surged and continue trending upward, recently passing $100,000 per coin. His presidency is also seen as a bullish indicator for tech stocks, as it will mean fewer restrictions on AI leaders.
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In November, a report from The Brookings Institute, a nonpartisan think tank, predicted that “The new administration is likely to instruct the Department of Commerce, the Federal Trade Commission (FTC), and other agencies to take a more hands-off approach to AI regulation.” Now that Sackwill is overseeing AI and crypto policy, that is even more likely.
During the 2024 election cycle, AI and crypto regulation emerged as two of the most pressing economic policy matters. Trump met with crypto industry leaders and touted the importance of Bitcoin, a stark contrast to when he criticized it in 2021 and called it a ‘scam against the dollar.’
While he hasn’t said much about AI or where he stands on it, his appointment of Sacks to oversee it shows that he favors deregulatory measures.
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Someone with Sacks’ background, which consists primarily of founding and investing in tech companies, is likely to support creating an economy in which these companies have as few rules as possible.
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Now, he will have the power to make that happen, especially if Musk uses his new agency to defund the regulatory agencies tasked with enforcing private sector regulations, such as the Consumer Financial Protection Bureau, something he has stated that he wants to do.
Which stocks will benefit from Sacks’ role?
Since Trump announced that Elon Musk would serve in his cabinet, Tesla (TSLA) stock has been rising steadily, with gains of 35% since election day. The fact that another Silicon Valley leader has been named to oversee AI regulation suggests that this growth is likely to continue as Tesla doubles down on AI to launch its self-driving vehicles.
TSLA stock isn’t the tech sector’s likely beneficiary, though. Many leading tech stocks are likely to benefit from the lack of AI regulation that Sacks is expected to usher in, such as Nvidia (NVDA) , Microsoft (MSFT) and Amazon (AMZN) .
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Another likely winner is Palantir Technologies (PLTR) . While not as valuable as some other AI peers, the company was founded by Peter Thiel, the former CEO of PayPal, who worked with both Sacks and Musk.
A data analytics and AI leader with a history of procuring lucrative defense contracts, Palantir also stands to benefit from rising geopolitical tensions that could potentially get worse under Trump. Veteran trader Stephen Guilfoyle recently increased his PLTR stock price target, citing multiple factors as reasons to be optimistic about its growth prospects.
The market regarded Trump’s victory as a bullish indicator for tech stocks before he announced any cabinet picks because it meant less regulation for industry-leading companies. Now that multiple Silicon Valley business leaders will be able to influence public policy directly, the market landscape looks even more promising for leading tech companies that are focused on scaling their AI endeavors.
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