Since President Trump's tariff announcement on April 2, tech stocks have struggled to find their footing. But some companies are clearly in deeper trouble than others.
In particular, hardware-focused tech firms with globally distributed supply chains are scrambling to assess the impact. While some tariffs may eventually be reduced through negotiation, the worst-case scenario would see elevated import duties remain in place — potentially triggering retaliatory tariffs from other countries.
Current tariff rates include:
These countries are key manufacturing hubs for smartphone components, according to Morningstar equity analyst Phelix Lee.
Gil Luria, Head of Tech Research at D.A. Davidson, said:
“This is the most significant shift in economic outlook since the onset of COVID-19.”
As investors assess how tariffs could impact valuations, risk tolerance is becoming a decisive factor. Those unable to stomach volatility or navigate prolonged uncertainty may shy away from hardware-heavy tech names.
For those choosing to stay in the game, it’s worth closely watching companies exposed to imported hardware.
According to J.P. Morgan's April 3 report, PCs are expected to face the largest price hikes, followed by servers and networking equipment.
While the administration says chips will be excluded from the latest tariffs, many semiconductors are embedded in finished goods like PCs and servers — meaning indirect exposure is still significant.
J.P. Morgan analysts noted that many tech companies had already begun adjusting supply chains and fine-tuning pricing models in anticipation of tariffs. However, the unexpectedly steep increases may force firms to accelerate reshoring efforts, which come at a high cost. Executives must now weigh whether these tariffs are a negotiation tactic or a long-term policy.
Luria observed:
“There was a lot of knee-jerk selling — you could see that in real time. But there’s also paralysis. If I like a company like Apple for the long term — if I believe people will continue buying iPhones and using more services — then I still want to own it. I don’t believe this is permanent.”
Pinpointing the exact impact is difficult, as it depends on a company’s sourcing geography — and that information isn’t always disclosed to the market.
J.P. Morgan estimates that, for hardware-centric firms, the blended effective tariff rate is around 30%, which could cut gross margins by 10% unless prices are raised.
Company-Specific Estimates:
Apple Inc.
Dell Technologies Inc.
Cisco Systems Inc.
Super Micro Computer Inc.
Hewlett Packard Enterprise Co.
Qualcomm Inc.
Big tech firms building out massive data centers — like Microsoft, Meta, Google, and Amazon — may also scale back capex as hardware costs surge.
Luria noted:
“These companies were building AI infrastructure far ahead of demand, made possible by strong core businesses and healthy cash flow. In a weaker economy, with declining demand for goods and services, they’ll likely pull back on those investments.”
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