| | | HP craters to multi-year low as tariffs impact IT hardware/networking stocks
Apr. 03, 2025 11:55 AM ET
By: Brandon Evans, SA News Editor
HP (NYSE: HPQ) shares tumbled 13% by noon trading on Thursday, as its stock price is on track to close at a multi-year low, following U.S. President Donald Trump's "Liberation Day" tariffs.
If the decline holds, HP shares will close at their lowest value since early January 2021. It is also on track for the largest intraday drop since 2019.
Dell Technologies (NYSE: DELL) took an ever bigger hit, with shares plummeting nearly 15% by noon action.
Many hardware companies were already under pressure due to policy uncertainty, deteriorating business and consumer sentiment, and a slowdown in enterprise hardware spending, according to Morgan Stanley.
"Yesterday's reciprocal tariff announcements will likely amplify these headwinds, given: most hardware companies that diversified manufacturing away from China will now be subject to at least 25% import tariffs (and as high as 54%); and this tariff cost will likely be passed entirely to the end-customer," said Morgan Stanley analysts, led by Erik Woodring, in a Thursday investor note.
Dell and HP, along with other hardware names such as Apple (NASDAQ: AAPL), Logitech (NASDAQ: LOGI) and GoPro (NASDAQ: GPRO), rely extensively on international manufacturing, Woodring noted. These last three stocks were down 8%, 15% and 10%, respectively.
"For DELL and HPQ, the added tariff cost could equate to nearly the entirety of their expected net income in 2025," he added.
"At a high level, we think companies with low gross margins (high material content) with limited competitive differentiation (i.e., pricing power without value destruction) combined with a large manufacturing presence abroad, and a high mix of US revenue are the ones most likely to be negatively impacted from the ongoing tariff challenges," said Evercore ISI analysts, led by Amit Daryanani, in an investor note. "Due to the global nature of electronics manufacturing, we think most of our broader coverage should see some level of impact." |
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