Despite Trump's tariffs, U.S. stocks with high international sales are beating domestic-focused names
HS 16/07/2025
Even with President Donald Trump’s tariffs, the U.S. stocks with the highest international sales are actually besting domestic-focused names. Indeed, a recent analysis from Goldman Sachs found that the 50 S & P 500 stocks with the greatest overseas footprint outperformed the 50 S & P 500 stocks with the least exposure by 7 percentage points in 2025. International facing stocks advanced 11% from the start of the year, while U.S.-focused names rose just 4%. A big part of that story is the U.S. dollar, which dropped more than 10% through June in its worst first half going back to 1973. A weakening dollar means, among other things, that U.S. consumers and companies are paying more for imported goods. For multinationals, however, a softening greenback makes it easier to sell American goods to other countries. “That’s where the real push comes from,” said Art Hogan, chief market strategist at B. Riley Wealth Management. “For a long time, the strong dollar had been a headwind. That has become a tailwind this year, and it’s going to start to show up when we hear earnings reports.” For stock pickers, that will continue to have strong implications for companies that derive much of their revenue from overseas, namely technology. While roughly 28% of the $17 trillion in revenue S & P 500 companies generated in 2024 came from international sales, the information technology sector derives more than half its sales from foreign markets, at 56%. Semiconductors as a group have outperformed, with the VanEck Semiconductor ETF (SMH) rallying more than 19% in 2025, even as the S & P 500 has gained just 6%. Monolithic Power Systems , which derives 97% of its revenue from overseas, is up more than 20% this year. Lam Research , with 93% of international sales, is up roughly 40%. Of course, that’s not just the weakening dollar, but also the strength of the artificial intelligence story, where demand has remained robust regardless of macroeconomic challenges. Automation providers have benefited from exposure to the AI story. Early in June, Emerson Electric chief operating officer Ram Krishnan reassured analysts on the company’s earnings call that the tariffs are having having minimal impact on demand. “We still have a pretty robust capital funnel,” Krishnan said according to a FactSet transcript of the call. “It hasn’t been impacted by tariffs and we continue to see these projects progressing and, hence the confidence that – as we laid out in our earnings call – the orders momentum is strong.” Shares of Emerson, which has roughly 60% exposure overseas, has rallied 13% this year. EMR YTD mountain Emerson Electric, year to date Other companies have also benefited from the weakening dollar. McDonald’s , for example, reaffirmed its full year 2025 financial targets, with CFO Ian Borden saying in the recent earnings call that foreign currency translation will be a tailwind for 2025 earnings. To be sure, part of the reason for the outperformance is that many investors have started to discount any tariff threats from Trump, who has repeatedly walked back or delayed his most severe tariff policies. That worries some traders who fear the stock market is getting complacent in the face of repeated bad news. Estee Lauder CFO Akhil Shrivastava said in the company’s most recent earnings call that he does not expect tariffs will have a material impact on fiscal 2025 profitability. However, without a clear resolution to trade negotiations, he said he expects a high tariff rate could have a “material impact” for fiscal 2026.
