US stocks have been rattled in recent weeks amidst fears that Trump tariffs could lead to a recession before the end of 2025.
However, an HSBC senior analyst says such concerns could prove inflated as we proceed through the remainder of this year.
Stephen Bersey does expect some pressure on the macroeconomy in the back half of 2025, but a recession, nonetheless, is a bit of a far-fetched idea, he told investors in a recent note.
And if the US doesn’t see a recession this year, there are two “Magnificent 7” stocks, Microsoft and Amazon, that could soar as much as 40% from their current levels, he added.
Microsoft Corp (NASDAQ: MSFT)
Microsoft stock has lost about 15% since late January amidst continued uncertainty related to the Trump administration’s policies and their potential impact on global trade.
Still, HSBC recommends loading up on MSFT shares on the weakness as potential growth from Azure is not fully baked into the tech stock at writing.
Its analyst Stephen Bersey’s revenue estimate (FY27) for Microsoft currently sits about 16% above consensus while his forecast for EPS also beats consensus by some 20%.
“We believe the consensus is underestimating the company’s ROI yield from Azure investment,” he added in a recent report.
Bersey has a $598 price target on Microsoft shares that indicates potential for a more than 55% upside from current levels, as long as the US economy does not end up in a recession.
Note that MSFT stock does also pay a dividend yield of 0.88% that makes it a bit more attractive to own at the time of writing.
Amazon.com Inc (NASDAQ: AMZN)
HSBC sees Amazon shares as strongly positioned to navigate the new tariffs environment and the related macroeconomic uncertainty.
The e-commerce and tech giant is currently down well over 20%, which Stephen Bersey’s research note dubbed an opportunity for the long-term investors to buy a quality name at a deep discount.
Despite aforementioned headwinds, the firm’s analyst is convinced that “fundamentally, not much has changed.”
He remains bullish on AMZN as it’s “well-positioned to capitalise on returns from its past strategic investments.”
HSBC expects Amazon Web Services to materially benefit once the macroeconomic environment returns to normalcy.
Its $280 price target on Amazon shares indicates potential for a more than 30% upside from here.
Bersey is positive on AMZN stock also because the company’s high-margin advertising business is growing at an accelerated pace.
In the latest reported quarter, that segment brought in a total of $17.3 billion, and help the titan handily surpass expectations for both top and the bottom lines.
Unlike MSFT, however, Amazon stock does not currently pay a dividend, and therefore, remains unattractive for income investors.
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