Wedbush Securities analysts predict a strong positive market reaction for the artificial intelligence and Big Tech sector following President Trump's re-election and a potential Republican win in Congress.

"We expect a very robust bullish market reaction this morning from a Trump win, with Big Tech and Tesla (TSLA, Financials) front and center," analysts said in a client note. Particularly for semiconductor and technology companies, the analysts pointed out that expected changes in China taxes and a tougher posture on Beijing under Trump would impact supply chains.

For Tesla, Trump's visit to the White House might result in significant benefits, maybe raising its price by $40 to $50 per share based on the memo advised. Analysts also predict a significant drive for artificial intelligence development involving Department of Defense projects benefiting companies like Palantir (PLTR, Financials), Microsoft (MSFT, Financials), Amazon (AMZN, Financials), and Google (GOOG, Financials).

Wedbush also pointed out prospective legislative changes, suggesting that Lina Khan would resign from the Federal Trade Commission Chairwoman, therefore opening the path for more merger and acquisition activity among big technological corporations.

Although the Inflation Reduction Act may have some changes that would provide difficulties for Intel (INTC, Financials) and other companies, Wedbush's analysis suggests that overall, the administration's policies will help Big Tech and AI expansion.

This article first appeared on GuruFocus.