Apple shares are plunging almost 10% in premarket trading, as the iPhone maker is viewed as especially exposed to the Trump administration’s tariff announcements.
As Bloomberg economists write in an overnight report (available to pro subs), “the US reciprocal 34% tariff on China and other nations where Apple has manufacturing will likely amplify operating-margin deterioration, given we don’t expect the company to hike prices to offset the effects.” They add that revenue growth “could remain under pressure if Apple does raise product prices, in addition to uneasy consumer sentiment, which might delay upgrades.“
Below we excerpt from several other Wall Street research reports, all of which reach the same conclusion:
Rosenblatt Securities (buy, PT $263)
- “Our quick math on Trump’s tariff Liberation Day suggests that this could blow up Apple,” and “that suggests something is likely to give,” like Apple getting an exemption or Trump reaching a deal with China and/or Vietnam
- “It’s hard for us to imagine Trump blowing up an American icon,” but “this looks pretty tough”
Citi (buy, PT $275)
- “If Apple cannot get exempted this time and assuming Apple gets hit by the accumulative 54% China tariffs and does not pass it through, we estimate about 9% negative impact to the company’s total gross margin”
Jefferies (underperform, PT $202.33)
- “The simple thought is likely that Apple’s products will be subject to this tariff, and thus demand will get hit and thus the supply chain will suffer,” although “our base case remains AAPL will be exempted from China tariffs”
Wedbush
- The firm sees the tariffs as “the start of negotiations,” and the selloff could represent “a major buying opportunity to own the best tech winners on sale for a policy that will be temporary and not permanent,” especially China-exposed names like Apple
- However, “numbers are now going to have come down across the tech world as just the sheer uncertainty from this tariff announcement heard around the world will cause some IT budgets to freeze”
While Apple is crashing by almsot double digits, the rest of the tech giants are also broadly lower, including: Microsoft -2.6%, Nvidia -5.6%, Amazon -6.1%, Alphabet -3%, Meta Platforms -4.6%, and Tesla -5.9%, Skyworks -3.8%, Broadcom -6.2%.
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