Microsoft (MSFT) is among tech companies that will likely face the impact of a potential slowdown in capital expenditure amid economic uncertainty caused by President Donald Trump's tariffs, Wedbush Securities said in a Thursday client note.

The "tariff game of poker" is increasing uncertainty in the near term for companies with supply chains and cost inputs linked to China, according to the note. As a result, 10% to 15% of cloud and artificial intelligence initiatives in the US could be delayed or scaled back.

President Donald Trump on Wednesday paused certain new tariffs for countries that have not retaliated against the US, but increased duties on China to 125% following countermeasures by Beijing.

"Microsoft will be front and center in this economic period of uncertainty," Wedbush analysts led by Daniel Ives wrote. "We have talked over the last week that unleashing this tariff Armageddon was always a negotiation tactic for Trump but the impacts and gamble to the real economy are a snowball that once it starts rolling downhill it cannot be just stopped."

The impact of curtailed capital spending by companies will likely be visible in the upcoming earnings season, Ives said. Microsoft is scheduled to release its fiscal third-quarter results on April 30.

Wedbush cut its price target on Microsoft's shares to $475 from $550, but maintained an outperform rating.

Wedbush now projects Microsoft's per-share earnings of $12.89 for fiscal 2025 and $14.40 for 2026, respectively, down from its previous estimates of $13.19 and $15.09. The current consensus on FactSet is for adjusted EPS of $13.16 for 2025 and $14.92 for 2026.

For the June quarter, the brokerage lowered its EPS estimate to $3.15 from $3.44. Analysts polled by FactSet currently expect the metric at $3.33.

"We believe investors will start to look past June results and view this quarter as a mulligan for Microsoft (and the rest of tech) as the uncertainty in the field caused by this tariff will push out a number of deals and projects into the September/ December quarters until CIOs get a better grasp around the rules of the games," Ives said.