Microsoft ( MSFT ) shares lagged their Big Tech peers on Friday after news broke late Wednesday that the Federal Trade Commission has opened a broad antitrust investigation into the tech giant.
After falling as much as 0.8% on Friday, Microsoft shares were roughly unchanged around 11:30 a.m. ET. The Nasdaq rose as much as 0.7%, while the S&P 500 rose 0.6% in a holiday-shortened trading session.
But at least one Wall Street analyst doesn’t see the news as a surprise and expects changes at the FTC under the Trump administration will ease antitrust concerns in the tech sector.
“In our view, these are the dark days for tech with Lina [Khan] with the FTC now numbered with a Trump White House, it’s not a complete shock that the FTC announced a broad sweeping investigation into Microsoft after the bell on Wednesday as a final shot at Kahn’s Big Tech before she goes,” said Wedbush analyst Dan Ives wrote in a note to customers on Friday.
Ives added that this investigation is “much more bark than bite” and will become a secondary concern for the company once President-elect Donald Trump appoints a new FTC leader.
According to Bloomberg, which broke the story, the FTC’s request to Microsoft is “hundreds of pages long” and focuses, among other things, on how the company bundles its cloud services with other software, such as its productivity suite (Word, Outlook, Excel ) and security offers.
Current FTC Chair Lina Khan has aggressively pursued antitrust actions against tech giants, including Alphabet (GOOG, GOOGL), Apple (AAPL) and now Microsoft.
Shares of Apple, Microsoft and Alphabet are all lagging the S&P 500’s (^GSPC) 26% gain this year.
Alphabet is currently facing its most serious threat, with a federal judge ruling earlier this year that the company’s Google search engine was being run as an illegal monopoly. Earlier this month, the DOJ asked the company to sell its Chrome browser and divest its Android mobile operating system.
Following Trump’s election victory, investor optimism grew that these various antitrust threats would disappear under his administration. However, some legal experts are less confident, as Yahoo Finance’s Alexis Keenan reported.
For his part, Ives sees the recent era in which regulators sought to limit Big Tech deals and scrutinize the world’s largest companies as one that is coming to an end.
“We believe there will be major shifts in policy against Big Tech in the coming years, with Trump in the White House and Khan at the FTC… we believe [it is] It’s only a matter of time and it will remove a huge thorn in the side of the tech world,” Ives wrote.
