International Revenue Risk

Mag 7 Risk Consideration

• As President Trump continues to threaten global trading partners with tariffs, one risk to consider is the exposure of U.S. based companies to foreign sales.
• Due to their size and scope, Large Cap companies (particularly the Magnificent 7) generate a large proportion of revenues from overseas.
• Mag 7 stocks have been able to maintain and expand profit margins, which has helped boost stock performance.
• While the impact of tariffs is difficult to know in advance, any threat to revenues and margins could lead to a valuation reset.
• In comparison, Small Cap and Mid Cap stocks may provide some protection from tariff-related risks due to a primarily domestic revenue base.