Beware these stocks lurking in your portfolio as China economy wobbles

Published Tue, Aug 15 20232:24 PM EDTUpdated Tue, Aug 15 20233:08 PM EDT

Turmoil in the Chinese economy can mean bad news for a range of popular stocks. U.S.-listed stocks ranging from chipmakers to resort chains and car-part makers can all be helped or hurt by the state of the Chinese economy. And the global superpower has flashed warning signs in recent days, signaling stocks with exposure to the country could feel pressure. Industrial production in China rose 3.7% on a year-over-year basis, according to data released on Tuesday. Economists polled by Reuters anticipated a 4.4% increase. Retail sales data was similarly underwhelming , coming in up only 2.5% on an annualized basis against a consensus forecast of 4.5%. To top it off: The country's central bank also issued a surprise rate cut on Tuesday. It marks the second reduction in three months and is seen among experts as the latest signal that Beijing is trying to buoy the economy. Given this landscape, it's important that investors are cognizant of which of their investments have exposure to the strength of China's macro economy. In May, Morgan Stanley screened for publicly traded companies in the U.S. with the highest share of revenue connected to China. Semis Some of the stocks with the most exposure to Chinese revenue: semiconductors. Within the sector, Nvidia had the highest share of revenue at 45%, Morgan Stanley found. Shares have surged this year amid growing excitement around artificial intelligence, though the stock is down nearly 5% in August. Nvidia shares have gained 9% since the week kicked off, making up lost ground after sliding about 8.6% in the prior trading week. Despite the swings, shares are still up more than 200% this year. The majority of analysts have buy ratings on the stock, with an average price target implying shares could climb an additional 12% over the next year, according to Refinitiv. Wells Fargo, UBS and Baird were among firms raising expectations for share prices ahead of Nvidia's earnings report slated for next week. Marvell Technology has the next most exposure at 42%, Morgan Stanley found. Shares have also rallied this year, up more than 59% after tumbling 57.7% in 2022. Wall Street sees more steam ahead for its rally with an average upside of about 17%, according to Refinitiv. Like Nvidia, the average analyst surveyed has a buy rating on the stock. Silicon Laboratories , Advanced Micro Devices and Qualcomm rounded out the list of most exposed semiconductor stocks. Other stocks to watch To be sure, exposure to China extends beyond the semi landscape. Battery manufacturer Microvast was the most exposed with 80% of revenue coming from China, Morgan Stanley's analysis found. After finishing 2022 off nearly 73%, the stock has been able to regain some ground with a 37% year-to-date advance. Resort and casino names Wynn Resorts and Las Vegas Sands also were among the stocks with the highest share of revenue tied to China at 76% and 62%, respectively. Wall Street analysts have watched both given Macao's status as a gambling destination. MVST ALL mountain Microvast's history Both stocks have moved similarly this year. Las Vegas Sands has risen nearly 15% on the year, while Wynn has jumped about 16%. And each has garnered buy ratings from the average Wall Street analyst, according to Refinitiv. Las Vegas Sands' average price target implies an upside of about 28%, while Wynn's signals that shares could rise 32%. Amphenol , Corning and Western Digital were also among the most exposed names. — CNBC's Michael Bloom contributed to this report