Many tech stocks plummeted this month after the Trump administration imposed its "Liberation Day" tariffs on most of the country's top trading partners. Higher tariffs against China, Taiwan, South Korea, Thailand, Vietnam, and India raised bright red flags for American tech companies, which were tightly tethered to those countries.
This storm might pass if cooler heads prevail, but it's too early to invest in tariff-wracked stocks like Apple before those headwinds wane. Instead, tech investors should seek out companies that are naturally insulated from tariffs.
Image source: Getty Images.
I believe three tech stocks fit that description: AT&T (T 0.40%), ServiceNow (NOW 2.54%), and Fortinet (FTNT +5.60%). I think it's a good idea to nibble on these stocks in smaller $1,000 increments over the next few quarters and simply let dollar-cost averaging smooth out your average returns in this choppy market.
The dividend play: AT&T
AT&T, one of the largest telecom companies in America, slimmed down its business over the past four years by spinning off DirecTV, Time Warner, and many of its smaller media assets. Those divestments freed up a lot of cash to strengthen its core 5G and fiber businesses, reduce its debt, and support its dividend payments.
NYSE: T
Key Data Points
In 2023 and 2024, AT&T added a cumulative 3.4 million postpaid phone subscribers and 2.1 million fiber subscribers, as many of its competitors struggled. Its annual free cash flow (FCF) grew 19% to $16.8 billion and rose another 5% to $17.6 billion in 2024 -- which easily covered its annual dividend payments of just over $8 billion.
Analysts expect AT&T's revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow by 1% and 3%, respectively. It's a slow grower, but it's well insulated from tariffs, pays a high forward dividend yield of 3.9%, and trades at just 7 times this year's adjusted EBITDA. That high yield and low valuation make it a safe place to park your cash.
The growth play: ServiceNow
ServiceNow's cloud-based platform helps companies streamline their unstructured work patterns into digital workflows. That process makes it easier to automate tasks, support hybrid and remote workers, and improve a company's efficiency. Its Now Assist AI platform further accelerates that process with AI chatbots and automation tools.
NYSE: NOW
Key Data Points
ServiceNow is well insulated from the tariffs because it only provides cloud-based services instead of importing and exporting physical goods. It's also resistant to macroeconomic headwinds since companies often use its services to streamline their businesses and cut costs during economic downturns. It generated 63% of its revenue in North America in 2024 and doesn't directly sell its services in China.
For 2025, analysts expect ServiceNow's revenue and adjusted EPS to grow 19% and 18%, respectively. It could certainly hit a few speed bumps as the trade war intensifies, and its stock isn't cheap at 47 times forward earnings -- but it still looks like a long-term winner that deserves to be accumulated as the short-sighted bulls retreat.
The cybersecurity play: Fortinet
Last but not least, cybersecurity stocks are resistant to tariffs for two simple reasons: they provide software services, and their clients won't shut off their digital defenses simply because their core businesses face tougher macro headwinds.
NASDAQ: FTNT
Key Data Points
One of the most reliable plays in the sector is Fortinet, which serves more than 830,000 customers across the world. Fortinet originally developed next-gen firewalls, which upgraded traditional firewalls with more network filtering tools, but it expanded that ecosystem into a "Security Fabric" that bundles together a wide range of on-premise and cloud-based security services. It differentiates itself from its competitors by developing its own custom chips that are optimized for its software and hardware.
Analysts expect Fortinet's revenue and adjusted EPS to grow 14% and 4%, respectively, in 2025. It expects its near-term margins to be squeezed by its development of new chips, but its long-term outlook remains bright. Its stock isn't a screaming bargain at 36 times forward earnings, but it's definitely worth nibbling on as the broader market swoons.
