Cisco, Nvidia, Arista Tackle Tariff Turmoil: Who's Best Positioned?

Tariffs, federal spending cuts and CoWoS (Chip-on-Wafer-on-Substrate) slowdowns are shaking up the hardware and networking sector. JPMorgan analyst Samik Chatterjee weighs in on which stocks are best equipped to weather the storm.

Tariffs: Who's Feeling The Heat?

Companies loaded with software-driven hardware are dodging the worst of the tariff blow, while commoditized IT hardware players are absorbing rising costs. Networking leaders like Cisco Systems Inc CSCO and Arista Networks Inc ANET have an edge, given their ability to pass costs down the chain.

Read Also: Nvidia Dominance Continues As AI Demand Grows: Can Arista, Cisco Keep Up?

Meanwhile, PC and server makers face tighter margins, with limited room to hike prices without losing customers.

Cisco's CFO has already factored in the tariff impact, while Arista's team says they've been planning for China risks ahead of time. The wildcard?

Storage and networking equipment appear largely insulated, but competitive server pricing could make cost pass-throughs a challenge.

Federal Spending Cuts: Who's At Risk?

A slowdown in government IT budgets might hit device makers harder than infrastructure players. Cisco, with more than 5% of revenue tied to federal spending, could see near-term pressure, but JPMorgan suggests long-term benefits from federal tech modernization.

Channel partners like CDW CDW also have notable exposure but are downplaying risks for now.

CoWoS Cuts: Nvidia's Supply Chain Feels The Squeeze

Recent CoWoS order cuts by Nvidia Corp NVDA and Amazon.com Inc AMZN are reshuffling supplier valuations. The biggest impact?

Nvidia-linked players like Fabrinet FN, Amphenol Corp APH and Coherent Corp COHR could face multiple compression, even if revenue estimates remain intact.

Cisco and Arista look relatively shielded from tariff pain, Nvidia's supply chain faces valuation headwinds and federal spending concerns might be a short-term roadblock for key players.

With hardware margins under pressure, JPMorgan's take is clear: software-rich and infrastructure-driven companies have the best shot at staying ahead.

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