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President Donald Trump seems determined to pick a trade war with China. And that’s bad news for investors in U.S. S&P 500 companies that rely on the region.
Eleven S&P 500 stocks, including Monolithic Power Systems (MPWR), KLA (KLAC) and Tesla (TLSA), disclose getting 20% or more of their revenue from China, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge.
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Such a high concentration of business could prove problematic for these firms now that Trump is hitting Chinese imports with a 145% tariff. China has responded with similar levies on U.S. goods it imports.
“Investors start to realize that even with the pause, a trade war with China is still happening, with very little clarity on the path ahead between the two nations,” said Robert Ruggirello, chief investment officer, Brave Eagle Wealth Management.
Monolithic Power Has A Huge China Problem
The industry most likely at the epicenter of the U.S.-China trade war is semiconductors. Most countries consider the manufacturing of computer chips to be a matter of national security.
Monolithic designs a variety of chips that go into everything from cars to appliances. But here’s the issue. More than 53% of the company’s revenue in the past 12 months came from China. That’s a higher reliance on China than any other company in the S&P 500. And that’s why it’s not surprising to see the stock down 18% this year so far. The stock’s RS Rating has collapsed to just 23. Analysts are hopeful the company’s profit will still rise 19% in 2025.
But Monolithic is just one example of the U.S. semiconductor companies positioned to get hit by the China tariffs. Of the 11 S&P 500 companies with 20% of revenue or more coming from China, more than half are in the semiconductor industry.
And that includes KLA, the No. 2 largest S&P 500 firm reliant on China. It got nearly 41% of revenue from China in the past 12 months. Investors, though, still haven’t reacted to this one. The stock is up 3.4% this year. That keeps the RS Rating at 54. Meanwhile, analysts are still calling for 33% earnings growth in 2025.
Not Just Chips At China’s Mercy
It might be temping to think Trump’s trade war with China is just a problem for semiconductor companies. But it’s more than that.
Electric vehicle maker Tesla is a case in point. The seller of the Cybertruck got more than 21% of its revenue from China. Additionally, CEO Elon Musk is somewhat of a representative of the Trump administration.
Investors are already trashing Tesla’s shares. They’re down 38% just this year — erasing billions from Musk’s net worth. The stock’s RS Rating is still a strong 83 and EPS Rating 84. But the chart is falling apart fast. Shares are trading below the 200-day moving average.
Perhaps Trump will retreat on his China tariffs as with the others. But if not, investors in these stocks will likely suffer.
S&P 500 Companies That Count Most On China
| Company | Ticker | China – % of revenue | Stock YTD % ch. |
|---|---|---|---|
| Monolithic Power Systems | MPWR | 53.40% | -18.2% |
| KLA | KLAC | 40.90% | 3.4% |
| Lam Research | LRCX | 37.10% | -9.1% |
| Albemarle | ALB | 36.50% | -36.2% |
| NXP Semiconductors | NXPI | 36.10% | -20.6% |
| Applied Materials | AMAT | 33.90% | -15.5% |
| Corning | GLW | 32.40% | -11.7% |
| Intel | INTC | 29.20% | -2.0% |
| Advanced Micro Devices | AMD | 24.20% | -27.5% |
| Amphenol | APH | 22.30% | -7.5% |
| Tesla | TSLA | 21.40% | -38.0% |
Sources: S&P Global Market Intelligence, IBD
Follow Matt Krantz on X (Twitter) @mattkrantz
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