Apple just sounded the alarm on a slowdown in China. Staying away from these 20 stocks could help you avoid the pain, Goldman Sachs says

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Chinese clients visit the Apple Store to purchase Apple products in Hong Kong Kowloon District on August 03 2018 in Hong Kong. S3studio/Marcio Rodrigo Machado/Getty Images
  • Apple just lowered its first-quarter revenue guidance and blamed its sales slump at least partially on a slowdown in China
  • Shares were down more than 9% Thursday.
  • The tech giant’s warning indicated that companies with heavy exposure to China are facing headwinds.
  • Goldman Sachs filtered 20 stocks that get the biggest percentage of their revenue from China.

Apple shares were under pressure Thursday after the tech giant lowered its first-quarter revenue guidance and blamed slumping iPhone sales on a slowdown in China.

“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” CEO Tim Cook wrote in a letter after Wednesday’s closing bell, sending Apple stock down more than 9%.

And it’s not just Apple that’s seeing weakness. The country’s economic slowdown is visible in the data. During the third quarter, China’s GDP grew at its weakest pace in a decade. And in December, China’s private-manufacturing sector contracted for the first time in 19 months.

The macroeconomic slowdown in China and Apple’s sales weakness are due to many related factors, according to SunTrust Robinson Humphrey analyst William Stein.

“These factors include: (1) US tariffs appear to be negatively impacting consumer confidence in China, (2) higher USD is likely denting demand in emerging economies, (3) competitive forces (both nationalistic and otherwise) from local vendors, particularly Huawei (private), may be triggering share loss away from AAPL, and (4) handset upgrade cycles may be slowing more than previously anticipated,” he said in a note out to clients on Thursday.

While it’s hard to determine which factor has had the biggest impact, most of them indicate companies with heavy exposure to China are facing headwinds.

Luckily for investors, Goldman Sachs maintains an index of US companies that get the largest percentage of their revenue from China. The firm filtered the 20 companies it thinks will take the biggest hit when the environment is unfavorable for trade between the US and China.

Here are the 20 companies that Goldman listed, in an order from sales least exposed to China to the most. (Goldman published the list in late October)


20. Apple

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Ticker: AAPL

Industry: Technologies

Market cap: $US738.58 billion

% of China sales: 20%

Source: Goldman Sachs & Markets Insider


19. Avery Dennison

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Ticker: AVY

Industry: Materials

Market cap: $US7.62 billion

% of US sales: 20%

Source: Goldman Sachs & Markets Insider


18. Agilent Technologies

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Ticker: A

Industry: Healthcare

Market cap: $US20.59 billion

% of US sales: 20%

Source: Goldman Sachs & Markets Insider


17. Corning

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Ticker: GLW

Industry: Technology

Market cap: $US23.73 billion

% of US sales: 22%

Source: Goldman Sachs & Markets Insider


16. Intel

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Ticker: INTC

Industry: Technology

Market cap: $US211.66 billion

% of US sales: 24%

Source: Goldman Sachs & Markets Insider


15. Xilinx

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Ticker: XLNX

Industry: Technology

Market cap: $US21.07 billion

% of US sales: 26%

Source: Goldman Sachs & Markets Insider


14. Aptiv

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Ticker: APTV

Industry: Automobile

Market cap: $US18.00 billion

% of US sales: 28%

Source: Goldman Sachs & Markets Insider


13. Amphenol

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Ticker: APH

Industry: Technology

Market cap: $US23.74 billion

% of US sales: 29%

Source: Goldman Sachs & Markets Insider


12. Microchip Technology

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Ticker: MCHP

Industry: Technology

Market cap: $US16.49 billion

% of US sales: 30%

Source: Goldman Sachs & Markets Insider


11. Advanced Micro Devices

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Ticker: AMD

Industry: Technology

Market cap: $US17.52 billion

% of US sales: 33%

Source: Goldman Sachs & Markets Insider


10. A.O.Smith

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Ticker: AOS

Industry: Industrials

Market cap: $US6.17 billion

% of US sales: 35%

Source: Goldman Sachs & Markets Insider


9. Western Digital

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Ticker: WDC

Industry: Technology

Market cap: $US10.37 billion

% of US sales: 39%

Source: Goldman Sachs & Markets Insider


8. IPG Photonics

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Ticker: IPGP

Industry: Industrials

Market cap: $US6.03 billion

% of US sales: 44%

Source: Goldman Sachs & Markets Insider


7. Texas Instruments

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Ticker: TXN

Industry: Technology

Market cap: $US90.10 billion

% of US sales: 44%

Source: Goldman Sachs & Markets Insider


6. Micron Technology

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Ticker: MU

Industry: Technology

Market cap: $US35.68 billion

% of US sales: 51%

Source: Goldman Sachs & Markets Insider


5. Qorvo

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Ticker: QRVO

Industry: Technology

Market cap: $US7.32 billion

% of US sales: 52%

Source: Goldman Sachs & Markets Insider


4. Broadcom

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Ticker: AVGO

Industry: Technology

Market cap: $US100.96 billion

% of US sales: 54%

Source: Goldman Sachs & Markets Insider


3. Qualcomm

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Ticker: QCOM

Industry: Technology

Market cap: $US68.22 billion

% of US sales: 65%

Source: Goldman Sachs & Markets Insider


2. Wynn Resorts

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Ticker: WYNN

Industry: Consumer service

Market cap: $US10.48 billion

% of US sales: 73%

Source: Goldman Sachs & Markets Insider


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1. Skyworks Solutions mi

Ticker: SWKS

Industry: Technology

Market cap: $US12.05 billion

% of US sales: 83%

Source: Goldman Sachs & Markets Insider


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