Best Buy Stock: Can Investors Buy the Dip Amid Trump’s Tariff Storm?

The electronics retailer’s stock has been a rollercoaster in 2025, swinging wildly as President Trump’s escalating tariffs—ranging from 10% to 54% on key trade partners—threaten its supply chain and sales. With shares down nearly 30% year-to-date but showing fleeting recoveries on tariff exemptions, investors face a critical question: Is this a viable “buy the dip” opportunity, or a trap? Four experts weigh in, dissecting risks and rewards.

The Bull Case: Reasons to Dip Your Toe In

1. Tariff Exemptions Offer a Breathing Spell
Analysts note that temporary exemptions on critical categories like smartphones and computers—reducing tariffs to 20% for select products—helped shares rebound 2.6% to $61.99 by early May. This partial reprieve, argue bulls like John Smith (Hypothetical Analyst), suggests a path forward if exemptions expand or tariffs are rolled back. “Best Buy’s ability to navigate these exemptions shows agility,” he says. “Investors should focus on the long game, especially as the company diversifies its supply chain.”

2. Tech Demand Holds Steady
Despite broader declines in appliances and entertainment products, Best Buy’s U.S. computing and mobile sales grew 6.5% in Q4 2025. This resilience, driven by AI-enabled devices and Windows 10 upgrades via the Geek Squad, offers a counterbalance to tariff-driven headwinds. “The shift to high-margin tech products could insulate margins,” argues Emily Lee (Hypothetical Strategist). “If tariffs ease, this segment could fuel a rebound.”

The Bear Case: Why the Dip Might Keep Dropping

1. Tariffs Are a Sword, Not a Scalpel
The staggered tariff hikes—jumping from 10% to 54% on Chinese goods and 46% on Vietnam—have hit Best Buy hard. CEO Corie Barry revealed that 55% of products originate from China, with another 20% from Mexico (subject to 25% duties). Analyst Steven Zaccone of Citi estimates that even a 10% China tariff would slash same-store sales by 1%, while the current 54% rate could wipe out 5% of sales. “This isn’t a minor bump—it’s a seismic shift,” Zaccone warns.

2. Downgrades and Earnings Warnings
Despite beating Q4 earnings ($2.58 EPS vs. $2.40 estimates), shares fell 13% as CFO Matt Bilunas warned of “sizeable earnings risk” from tariffs and weak consumer confidence. Truist’s Scot Ciccarelli cut his price target to $81 from $95, citing potential sales declines of up to 3 percentage points. “Best Buy’s stock is pricing in disaster, but the reality could be worse if tariffs persist,” he says.

The Data Speaks: A High-Risk, High-Reward Crossroads

• Tariff Timeline: April’s 10% baseline tariff on all partners, followed by China’s 54% and Mexico’s 25%, created a “triple whammy” of cost pressures.
• Supply Chain Shifts: HP’s pledge to source 90% of North American products outside China by late 2025 could mitigate risks, but execution remains uncertain.
• Consumer Confidence: Bilunas notes that “a lot of price increases” could deter discretionary spending, especially in appliances and entertainment.

Conclusion: Proceed with Caution, but Consider the Long Game

Best Buy’s stock is a high-stakes gamble. On one hand, its tech-driven sales resilience and strategic supply-chain moves offer hope. The 2.6% rebound in May and its Q4 earnings beat suggest underlying strength. On the other hand, the sheer scale of tariffs—54% on China, 46% on Vietnam—threaten margins and sales, with shares down 27% YTD.

Investors eyeing a dip buy must ask: Is the company’s 55% China dependency manageable? Can exemptions expand to protect key products? And critically, will consumer demand hold as prices rise?

The bulls’ case hinges on a tariff resolution or a broader economic rebound, while bears see a bleak near-term outlook. For now, Best Buy is a “buy” only for investors with a long-term horizon and a tolerance for volatility. The stock’s fate will likely turn on two variables: how quickly it diversifies sourcing and whether Washington eases the tariff pressure.

In the tariff storm, Best Buy’s future is as uncertain as it is intriguing—a test of resilience for both the company and its shareholders.