Apple and Other Tech Stocks Likely to Take a Hit From Tariffs
Big tech could get hit hard from the expected tariffs to be announced later today. That’s because most tech goods—from semiconductors to the aluminum used for computer cases—are assembled abroad, where labor is cheaper, even if the products end up being sold in the U.S.
Take Apple as an example. Most iPhones are made in China and India, which means the tech giant’s fat gross margin—37% on goods in the last fiscal year—could take a hit, causing a pull back in the stock price.
“Companies bringing goods into the U.S. will experience higher costs,” analysts at LPL Research wrote in a Monday note. “Only some of those costs will be passed along to consumers who already have inflation fatigue, leading to profit margin compression.”