H-1B Visa Cost Surge to $100,000 May Impact Tech Giants' Stocks

Recently, the U.S. President has issued a new regulation that significantly increases the cost of H-1B visas to 100,000 dollars per visa. This policy change has sparked discussions among market experts about its potential impact on large technology companies, particularly the "seven giants" that dominate the U.S. stock market.

Historically, large U.S. technology companies have relied on relatively low-cost, high-quality labor from countries like India and China, especially in the field of technology research and development. Last year, 71% of H-1B visa holders were from India. With the new regulation, each foreign employee would cost 100,000 dollars in visa fees, which is likely to affect the operations, finances, and stock prices of the "seven giants." Investors are particularly concerned about how the new H-1B employee policy will impact the technology sector and related stocks.

Given the technology sector's leading role on Wall Street, this concern is justified. The S&P 500 Information Technology Index has risen 19.75% so far this year, significantly outperforming the S&P 500 Index's 13.7% year-to-date gain. Following recent surges in Apple and Tesla, the "seven giants" have all returned to positive year-to-date returns.

According to a report from the U.S. Department of Labor, nearly 50% of H-1B visa applications this fiscal year are related to the "professional, scientific, and technical services" sector. Since most H-1B visa holders are employed in the technology industry, it is widely believed that this sector will be the first to feel the impact of the new visa policy.

In terms of H-1B visa employee salaries, approximately 30% of H-1B employees earn 100,000 dollars or less per year, while only 10% earn more than 200,000 dollars. This means that the additional fees will significantly impact the cost of hiring these workers.

Despite their substantial financial resources, technology giants may still be able to afford the higher visa costs of 100,000 dollars. Previously, the cost per H-1B foreign employee ranged from 1,700 to 4,500 dollars, depending on the processing time for expedited visas. Analysts suggest that the 100,000-dollar visa fee may not immediately affect the stock prices of U.S. technology giants. However, as with Wall Street's typical approach, professional traders focus on long-term benefits, and this situation may change as the new fee policy is gradually implemented.

“In the short term, I do not expect a significant direct impact on stock prices. However, Wall Street has always been averse to uncertainty; they prefer certainty,” said the chief investment officer of a wealth management firm. The officer pointed out that such a drastic change could cause "some short-term volatility" as institutional investors determine the actual probability of its downstream impact. “In the long run, if talent shortages lead to product delays or profit pressure, it could drag down earnings multiples. Investors will closely monitor corporate hiring disclosures.”

Investors should focus on the following technology giants in the future: Amazon, Microsoft, Meta, Apple, Alphabet, and Oracle. As of late September, there are over 600,000 H-1B visa holders working in the U.S., with a significant portion in the technology industry. Amazon, Microsoft, Google, and Meta have consistently been among the top sponsors of H-1B visas, and these companies will be the first to feel the greatest pressure, but the indirect impact will also affect the entire industry.

In future trends, savvy investors may also want to pay attention to technology startups, which may be more negatively affected by the new 100,000-dollar visa plan. In the U.S., about 40-70% of high-growth technology startups supported by venture capital have at least one foreign-born founder, especially in the currently popular fields of artificial intelligence and deep technology. Many foreign company founders register their startups and use them as a vehicle for H-1B visa applications. After participating in financing, many venture capital firms require or at least prefer that foreign founders of startups reside in the U.S. to help establish local partnerships. Due to the 100,000-dollar cost being a significant fixed expense for many early-stage startups, the strategies for company establishment and early-stage financing for startups founded by foreign entrepreneurs may undergo significant changes. In comparable conditions, foreign founders may be less likely to choose to establish and expand their companies in the U.S., while early-stage venture capital firms may be more inclined to invest in domestic startups to avoid this expense.

Some immigration experts have expressed concern that the Trump administration's actions may be just the beginning, with more changes affecting H-1B holders likely to follow. The co-chair of the immigration practice group at a law firm stated, “We believe that this is just the first step in the government's attack on the H-1B program.”