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Takeaways
- Apple shares fell Friday amid concerns about tariffs, after CEO Tim Cook stated that they could cost the firm $900 million in this quarter.
- Wedbush said Apple's shift toward importing iPhones from India could help the company navigate the "tariff tornado."
- JPMorgan warned that Apple could get ahead of the tariffs’ impact by building up its inventory. However, this benefit would fade the longer levies remain in place.
Apple (AAPL), shares fell Friday amid concerns about tariffs, after CEO Tim Cook warned that they could cost the firm $900 million in this quarter.
Apple shares fell nearly 4%, closing just above $200. The stock has lost almost a fifth of its worth so far this year.
Wedbush analysts stated that “the elephant in the room is the tariff tornado, with Apple and Cook caught at the eye of it,” after the company announced its fiscal second-quarter results, which exceeded analysts’ expectations. Analysts are still bullish and have raised their price target from $250 to $270, partly because Cook said during Apple’s earnings conference that the majority of iPhones sold in America this quarter will be from India rather than China.
Cook’s remarks come amid concerns Apple may be hurt by the trade tensions with China. Apple manufactured approximately 90% of its product until recently. Most Apple products are exempt from President Trump’s 125% “reciprocal” tariffs on Chinese goods, but still affected by the 20% import tax the White House put in place earlier in the year to combat fentanyl trafficking, Cook noted during Thursday’s call.
Bank of America analysts also reduced their price target to $235, up from $240. JPMorgan analysts cut their Apple price target to $240 on Friday. JPMorgan warned Apple that it may be able get ahead of tariffs if they build up inventory. But this benefit will fade as the tariffs are in effect for longer.
Last week, Trump said he expects tariffs on China “will come down substantially” in trade negotiations but not drop to zero. A spokesman for China’s Commerce Ministry said this week that Beijing was “currently evaluating U.S. offers to begin trade negotiations”.
This article was updated since its first publication to reflect current share prices.
