Shares of Apple Inc. (AAPL) experienced a significant decline today, trading over 5.6% lower as of 12:52 p.m. ET, extending a sell-off that began following President Donald Trump’s announcement of extensive tariffs last week. The tech giant’s stock has been under pressure as analysts reassess the potential fallout from these tariffs, with Wedbush analyst Dan Ives lowering his price target for Apple while maintaining a bullish outlook.
In a recent research report, Ives, who has consistently been optimistic about major tech stocks in the “Magnificent Seven,” expressed serious concerns regarding the implications of the tariffs. He described the situation as “Tariff Armageddon,” predicting that the tariffs could set back the U.S. tech industry by a decade, with China emerging as the clear beneficiary. In his analysis, Ives lowered his price target for Apple from $325 to $250, while still holding an Outperform rating on the stock.
Ives highlighted that Apple is particularly vulnerable to the tariffs due to its extensive production footprint in China. With approximately 90% of iPhones produced and assembled in the country, the analyst believes that no other U.S. tech company is as negatively impacted by these tariffs as Apple. He further noted that more than half of Apple’s Mac computers and at least 75% of its tablets are sourced from China, underscoring the company’s reliance on Chinese manufacturing.
The prospect of relocating manufacturing operations to the United States is not a feasible solution in the short term, according to Ives. He estimates that moving just 10% of Apple’s production and supply chain to the U.S. would take around three years and cost approximately $30 billion, all while risking significant disruptions to the company’s operations.
As of the latest trading session, Apple’s stock had fallen over 19% in the past five trading days, reflecting growing investor anxiety over the potential earnings impact of the tariffs. The current market cap of Apple stands at approximately $2.7 trillion, with shares trading between $174.63 and $194.13 today. Despite the recent downturn, Ives remains optimistic about Apple’s long-term prospects, suggesting that the stock could be a buying opportunity for long-term investors willing to weather near-term volatility.
Looking ahead, Apple’s best chance for relief from the tariffs would be to secure some form of exemption from the Trump administration, similar to what the company received during Trump’s first term. However, there are currently no indications that the administration is willing to back down from its tariff stance.
While the implementation of these tariffs is unlikely to lead to Apple’s downfall, Ives warns that they will likely result in significant earnings pain for the company. Investors should be prepared for continued volatility as the situation unfolds. The combination of geopolitical tensions, supply chain challenges, and changing market dynamics will require careful navigation from Apple as it seeks to maintain its leadership position in the tech industry.
In conclusion, while the current environment poses challenges for Apple, the company’s strong brand and loyal customer base may help it weather the storm. Investors should stay informed and consider the long-term potential of Apple as they assess their investment strategies in light of the ongoing tariff situation.
