- If Trump's tariff threat turns into reality, companies with high revenue exposure to China including semiconductor suppliers and retailers will likely become casualties, according to Wall Street analysts.
- HSBC says U.S. companies with big China sales are concentrated in the tech sector including Skyworks Solutions, Broadcom, Micron Technology and Intel.
- UBS says home furnishing retailers Bed Bath & Beyond, William-Sonoma and Restoration Hardware could have "significant risk" given many of their products are sourced in China.
All it took was two tweets from President Donald Trump to rattle the markets, and these companies could be hurt the most by them.
Trump threatened in a Twitter post Sunday to hike tariffs on goods imported from China, which instantly jolted the stock market that had been heading higher steadily on better-than-expected earnings and trade deal hopes. If the threat goes through, companies with high revenue exposure to China including semiconductor suppliers and retailers will likely become the biggest casualties, according to Wall Street analysts.
HSBC complied a list of companies with big sales in China most sensitive to tariffs. U.S. companies with a major China footprint are concentrated in the tech sector including Broadcom, Micron Technology and Intel.
"Semiconductor suppliers have relatively high 'ship-to' revenue exposure to China," Quinn Bolton, senior semiconductor analyst at Needham, said in a note Monday. "This high exposure to China puts the semiconductor sector at greater risk to the escalation in the U.S.-China trade war than many other segments of technology."
Bolton highlighted MaxLinear, Ambarella, Monolithic Power Systems and Semtech, which all have more than 50% sales in China based on their 2018 results or 2019 guidance. The Vaneck Vectors Semiconductor ETF is down 2.6% Monday, on pace to post its worst day since March 22.
Some retailers could also be under pressure as elevated tariffs would stoke rising costs for the imported goods they sell, according to Michael Lasser, equity analyst at UBS.
"If the move to 25% tariffs goes through and it persists for an extended period, we believe the impact to many hardline, broadlines, and food retailers would be significant," Lasser said in a note Monday. "The brunt of a full 25% tariff would likely be quite inflationary as the retailers have indicated they would use strategic price actions, where possible to mitigate the impact."
Correction: A previous version of the story stated Skyworks Solutions has 87% China revenue exposure, but its recent financial statement says it has about 25% sales in China.
— CNBC's Michael Bloom contributed reporting.