We recently compiled a list of the 10 Stocks Bear the Brunt of Trade Threats. In this article, we are going to take a look at where Best Buy Co., Inc. (NYSE:BBY) stands against the other stocks.

Wall Street’s main indices fell further on Tuesday as investors sold off positions to mitigate risks from the ongoing trade tensions among some of the world’s largest economies.

The Dow Jones fell the most during the trading session, losing 1.55 percent, while the S&P 500 declined 1.22 percent. The Nasdaq dropped by 0.35 percent.

Following the US imposition of a 25-percent tax on goods from Canada and Mexico on Tuesday, countries announced a promise to retaliate. Canada, as well as China, which received a 10 percent additional tax, immediately announced retaliation. Mexico is expected to follow suit.

The negative sentiment spilled over to 10 stocks, predominantly retailers, with the tariff threats seen to pose pressures on their profit margins. In this article, we have detailed the reasons behind their declines.

To come up with Tuesday’s worst performers, we considered only the stocks with $2 billion in market capitalization and $5 million in daily trading volume.

A busy retail store showcasing a wide range of consumer electronics.

Best Buy Co., Inc. (NYSE:BBY)

Best Buy Co., Inc. (NYSE:BBY) took a battering on Tuesday, losing 13.30 percent to finish at $75.20 apiece as investors sold off positions following its CEO’s pessimistic outlook, saying that prices for US consumers would rise as tariffs on China and Mexico officially took effect.

During Best Buy Co., Inc. (NYSE:BBY)’s earnings call, CEO Corie Barry said that the company expects its vendors across all segments to pass along some level of tariff costs to retailers.

This, she said, would make price increases for American consumers “highly likely.”

She added that Best Buy Co., Inc. (NYSE:BBY) directly imports 2 to 3 percent of its products and that the company is now reviewing and evaluating supply chain sources.

“The giant wild card here, obviously, is how the consumers are going to react to the price increases, in light of a lot of price increases potentially throughout the year and a general consumer confidence that is showing a little signs of weakness at the moment,” added BBY CFO Matt Bilunas on the call.

Overall BBY ranks 1st on our list of Tuesday's worst performers. While we acknowledge the potential of BBY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BBY but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

 

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Disclosure: None. This article is originally published at Insider Monkey.