Apple (AAPL 0.50%) is often considered a reliable blue chip tech stock. But since the beginning of 2025, its stock has sunk nearly 30% amid fears of higher tariffs. Apple generates most of its revenue from its iPhones, iPads, and Macs, and most of those hardware products are manufactured in Asia.
The Trump administration's "Liberation Day" tariffs against its production hubs in China, India, and Vietnam will drive up its manufacturing costs. Apple also generated 58% of its sales outside of the Americas in its latest quarter, and the retail prices of its products in those overseas markets could skyrocket as individual countries retaliate with tit-for-tat tariffs.
Image source: Apple.
Therefore, a protracted escalation of these tariffs would throttle Apple's revenue growth and crush its margins. Apple should weather that incoming storm -- since it still ended its latest quarter with $141 billion in cash and marketable securities -- but its stock could keep sinking unless cooler heads prevail and reconsider those massive tariffs.
Even after its latest pullback, Apple's stock is up about 6% over the past 12 months. It still trades at 24 times forward earnings -- which isn't cheap compared to analysts' expectations for 8% earnings growth in fiscal 2025 (which ends this September) and 11% earnings growth in fiscal 2026.
So instead of investing in Apple right now, it might be smarter to buy these two tariff-resistant tech stocks instead: VeriSign (VRSN +4.53%) and Palo Alto Networks (PANW +4.37%). Here's why.
VeriSign
VeriSign operates the authoritative domain name registries for the internet's two most popular top-level domains: .com and .net. It's also the primary subcontractor for the .edu and .jobs domains. It sells those domain names to registrars like GoDaddy, which subsequently sell them to individuals, businesses, and organizations.
From 2014 to 2024, VeriSign's number of year-end .com and .net registrations grew from 130.6 million to 169 million with an average renewal rate in the low 70s. Its revenue rose at a compound annual growth rate (CAGR) of 4%, its earnings per share (EPS) increased at a CAGR of 12%, and it bought back nearly a fifth of its shares.
NASDAQ: VRSN
Key Data Points
Over the past 10 years, its stock has risen more than 240% as the S&P 500 rose nearly 140%. It outperformed the market because it operates an evergreen business model with predictable growth and a wide moat.
The company previously faced some calls for an antitrust probe of its dominance of the internet's most popular domains, but those regulatory headwinds largely dissipated last August after the U.S. government renewed two of its key .com agreements with VeriSign for another six years. Its business also shouldn't be meaningfully impacted by higher tariffs, since most businesses and organizations won't stop renewing their domain name registrations just to save a few dollars.
Analysts expect VeriSign's EPS to rise 9% in 2025 and 6% in 2026. It still looks reasonably valued at 27 times forward earnings, and it should remain a reliable investment regardless of the near-term headwinds for the global economy.
Palo Alto Networks
Palo Alto Networks is one of the world's largest cybersecurity companies. It serves more than 80,000 enterprise customers worldwide, and it operates three main ecosystems: Strata for its firewalls and on-site network security services, Prisma for its cloud-based services, and Cortex for its artificial intelligence (AI)-powered threat detection services.
From fiscal 2014 to 2024 (which ended in last July), Palo Alto's revenue rose at a CAGR of 30%. Most of its recent growth was driven by Prisma and Cortex, which it refers to as its "next-gen security" (NGS) services. It also turned profitable on a generally accepted accounting principles (GAAP) basis in fiscal 2023, and its GAAP EPS rose more than fivefold in fiscal 2024.
NASDAQ: PANW
Key Data Points
Palo Alto's business is well insulated from tariffs because its clients won't shut off their digital defenses just to save a few dollars. The macro headwinds might make it more challenging to lock in new contracts as companies rein in their spending, but it won't lose too many of its existing customers. Its aggressive "platformization" strategy, which bundles more tools to drive out smaller stand-alone cybersecurity competitors, could further strengthen its long-term defenses.
From fiscal 2024 to 2027, analysts expect Palo Alto's revenue to grow at a CAGR of 15%. Its EPS is expected to dip in fiscal 2025 as it laps a one-time tax benefit, but it's expected to continue growing at a CAGR of 24% over the following two years. Its stock might seem a bit pricey at 76 times its forward GAAP EPS, but it deserves that premium valuation because it will likely remain one of the few growth stocks which can flourish in this challenging environment.
