Apple Stock (AAPL) Brushes Off a Big Threat, But Trump Still Holds the Key
Apple (AAPL) stock surged over 2% after brushing off a major setback thanks to the Trump administration’s weekend announcement of temporary tariff exemptions on tech products. Notably, the iPhone maker led a broader rally among the Magnificent Seven (MAGS) stocks, though the relief may prove short-lived. Year-to-date, AAPL stock has declined by over 19%.
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Apple led the gains, followed by Google (GOOGL) with a 1.23% rise and Tesla (TSLA) inching up 0.016%. However, the remaining Magnificent Seven stocks, Nvidia (NVDA), Microsoft (MSFT), Amazon (AMZN), and Meta Platforms (META), ended the day in the red.
Trump’s Tariff U-Turn
To gain some context, President Trump announced on Friday that items such as smartphones, computers, and semiconductor-related electronics would not face the harsh retaliatory tariffs placed on Chinese goods. However, by Sunday night, he clarified that these electronic products will instead be subject to a targeted or specialized type of tariff shortly.
For Apple, the updated exemption list includes nearly all of the company’s key products, including smartphones, computers, tablets, and accessories.
Apple’s Fate Hangs on Trump’s Trade Decisions
Despite a rebound, Apple shares still closed last week nearly 12% lower than before the original tariff news broke. In contrast, the other five mega-cap tech giants saw an average drop of just 2%.
Friday’s exemptions may offer some relief, but Apple still faces significant pressure to diversify its manufacturing. However, this shift could be costly, even if it doesn’t lead to more than a million U.S. workers assembling iPhones at U.S. wage levels. Notably, China’s manufacturing edge gives it a strong competitive advantage, a key reason why Apple and nearly all major tech hardware companies rely on it for most of their production.
Additionally, tariff uncertainty comes in a year when Apple is already facing challenges from sluggish iPhone sales in the U.S., Europe, and China as well as setbacks in launching new generative AI features across its product lineup.
Citi Analyst Cuts Price Target for AAPL Stock
Five-star-rated analyst Atif Malik from Citi reduced his price target on AAPL stock from $275 to $245 while maintaining his Buy rating.
Malik stated that Apple products are not shielded from a challenging macroeconomic environment. As a result, Citi has downgraded its iPhone, Mac, and wearable unit projections to align more closely with Citi’s forecast of a 70-point global GDP contraction in 2025.
Is Apple Stock Price a Buy?
On TipRanks, AAPL stock has a consensus Moderate Buy rating among 33 Wall Street analysts. That rating is based on 17 Buy, 13 Hold, and three Sells assigned in the last three months. The average AAPL price target of $240.89 implies a 19% upside from current levels.
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