Dow Jones
08:30
Apple stock dropped on Friday after the company put a number on its financial hit from President Donald Trump’s tariffs. While a plan to build more iPhones in India should help it escape the worst of the levies, Wall Street is still nervous about what comes next.
CEO Tim Cook told analysts that shipping devices sold in the U.S. from India and Vietnam, rather than China, would add about $900 million to the company’s costs for the June quarter in the company’s earnings call on Thursday.
Apple shares closed lower 3.7% at $205.35.
That might seem like something of an overreaction for the added costs. But there is no guarantee yet that India and Vietnam won’t also face tariffs, despite positive noises about an Indian trade deal from the Trump administration.
The cost of the changes to Apple’s supply chains could be at least double the currently forecast amount —meaning $1.8 billion per quarter— for several quarters beyond June, according to Melius Research analyst Ben Reitzes.
However, Reitzes said Apple should be able to deliver on its plan to ship all U.S.-bound iPhones from India, which it has been reported to be aiming to do by the end of 2026. The analyst has a Buy rating and $240 target price on Apple stock.
It also isn‘t clear how Beijing will react to Apple’s decision, although products shipped to countries besides the U.S. will continue be made primarily in China, Cook said.
CFRA analyst Angelo Zino suggested Apple might be bracing for a further hit from tariffs, noting the company’s announced $100 billion stock buyback plan was lower than the $110 billion it announced a year ago.
“We found [the stock buyback] a bit of a head-scratcher, as Apple historically either holds its buyback or increases its authorization versus the prior year (possibly reflects tariff concerns),” Zino wrote in a research note.
Zino had a Buy rating and $235 target price on Apple stock coming into the report.
Apple said its forecasts don’t assume an economic slowdown, which means there is considerable uncertainty around its outlook. There are also wider concerns about Apple’s business and a lack of innovation in artificial-intelligence features for the iPhone. An AI update to the virtual assistant Siri is still nowhere in sight.
While iPhone revenue for the first quarter of $46.8 billion grew 1.9% from the prior year and was ahead of expectations, that could be a result of the introduction of the lower-priced 16e version of its latest smartphone model. Analysts have previously cited concerns that the cheaper model could eat into demand for premium devices.
“We think Apple’s tariff mitigation efforts are likely better than most expect, but at the end of the day, we believe Apple is likely a little-to-no-growth business, where expectations continue to call for an acceleration in growth into 2026,” wrote KeyBanc analyst Brandon Nispel in a research note.
Nispel kept a Sector Weight rating on Apple stock, with no price target.
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