Apple Shares Slide—What Investors Should Know
Apple Faces Tariff Uncertainty but Has a History of Exemptions
Apple’s strong brand loyalty, high profit margins, and past success in securing tariff exemptions may help it weather the latest trade challenges.
On Wednesday, President Donald Trump announced a new 34% tariff on Chinese goods—on top of an existing 20% tariff—sending shockwaves through the tech sector. Wedbush analyst Daniel Ives called the move “worse than the worst-case scenario” and described the tariff hike as “a jaw dropper.”
Apple Inc. (AAPL) was among the hardest-hit stocks, falling 7.1% in after-hours trading. If those losses extend into Thursday’s session, it would mark Apple’s steepest single-day drop since September 3, 2020, when shares fell 8.0%.
Despite investor concerns, Apple was granted tariff exemptions during Trump’s first term, raising speculation about whether the company can secure similar relief this time.
Ives remains optimistic. “It’s a very nervous announcement for Apple given its China exposure,” he told MarketWatch. However, he believes iPhones and other Apple products will likely be exempt again. “Investors will sell first and ask questions later, but we saw this play out in Trump 1.0,” he added.
Apple’s sharp stock decline underscores two key challenges. First, while the company has diversified its supply chain—expanding production to Vietnam—Trump also announced a 46% tariff on Vietnamese goods, limiting Apple’s ability to sidestep the impact. Second, in today’s economic climate, raising prices to offset tariffs could hurt demand and squeeze profitability.
Still, some analysts believe the selloff is overdone.
“Even without an exemption, Apple may not be as affected as people fear,” said Angelo Zino, a technology analyst at CFRA, who maintains a buy rating on the stock. “Over the last six years, Apple’s gross margins have grown from about 38% to 47%, giving them room to absorb some of the costs.”
Apple could also distribute the burden across its supply chain. And if prices rise, the company is betting that its strong customer retention and ecosystem of services—accounting for 21% of total revenue—will help mitigate the impact.
“For now, the White House says it isn’t making deals,” Ives wrote. “But we believe negotiations and workarounds will emerge in the coming months as companies and countries adjust to this new tariff environment.”
Apple did not immediately respond to MarketWatch’s request for comment. When asked about tariffs during its January earnings call, CEO Tim Cook said the company was “monitoring the situation” but had no further comment.
Zino remains confident in Apple’s ability to navigate the uncertainty. “We trust Apple’s leadership more than most in the tech industry.”
