TLDR:
- Tech stocks rally as US excludes smartphones and computer parts from China tariffs
- Apple shares climb 5.5% in premarket trading, recovering from previous 9.1% decline
- UBS analyst projects reduced earnings impact of only 5% on 2026 forecasts
- Trump administration signals possible new semiconductor tariffs within days
- Apple accelerates India production strategy as hedge against future trade tensions
US tech shares surged Monday following the White House’s decision to exempt smartphones and computer hardware from steep tariffs on Chinese imports. The move eased fears that had weighed on the sector for weeks.
Apple stock jumped 5.5% in premarket trading after falling 9.1% in the previous two weeks. Investors had worried that tariffs exceeding 100% would force price hikes on iPhones and other devices primarily manufactured in China.
The exemptions cover 20 product categories including computers, laptops, semiconductor devices, memory chips, and display panels. The decision reflects concerns within the Trump administration about potential consumer backlash to higher prices on popular electronics.
Other tech firms also saw their stocks rise. Computer makers HP and Dell Technologies gained 6% and 6.8% respectively in premarket trading. Chip manufacturer Nvidia added 1.8% as part of a broader semiconductor sector recovery.
European tech stocks joined the rally. Companies with strong US exposure like ASM International and Infineon rose between 3% and 3.8% in morning trading.
Market Reaction and Analyst Perspectives
Wall Street analysts quickly assessed the implications of the tariff exemptions. UBS analyst David Vogt maintained his “Buy” rating on Apple with a $236 price target, suggesting a 19.1% upside.
Vogt had previously calculated that the originally proposed 145% tariffs could have slashed Apple’s earnings by up to 30%. With the exemption in place, he now expects the impact to be limited to about $0.34 per share, or roughly 5% of his 2026 earnings forecast of $7.49.
“This is a major relief for Apple,” said Evercore ISI analyst Amit Daryanani. “The tariffs would have driven material cost inflation.” He predicted an Apple stock rally following the 11% decline earlier in April.
Asian suppliers to Apple also benefited from the news. Foxconn, Apple’s largest iPhone assembler, rose as much as 7.8% before settling 3% higher. Contract laptop maker Quanta closed up 5.8%, while AI server manufacturer Inventec gained 4.1%.
Future Uncertainties Remain
The current exemptions may offer only temporary relief. President Trump pledged on Sunday to announce fresh tariffs on imported semiconductors “within days” as part of his push to shift manufacturing away from China.
Commerce Secretary Howard Lutnick added that exempted electronics would face separate new duties along with semiconductors within the next two months. These statements have kept tech investors cautious despite the immediate reprieve.
“The net effect is positive for tech,” explained Matt Britzman, senior equity analyst at Hargreaves Lansdown. “This reprieve gives Apple time to build up its US inventory to cover the current iPhone sales cycle without needing knee-jerk price hikes.”
Production Strategy Shifts
Apple continues to diversify its manufacturing footprint in response to ongoing trade tensions. The company has boosted iPhone production in India, which now accounts for 20% of its global output.
Industry experts project that Indian facilities could soon produce over 30 million iPhones annually, potentially meeting a large portion of US demand. This shift helps Apple reduce its reliance on China-based manufacturing.
However, the transition faces challenges. The upcoming iPhone 17 is still primarily scheduled for production in China, highlighting the complexity of rapidly changing global supply chains.
“The removal of the worst-case scenario provides support for the sector,” noted analyst Alberto Gegra of Equita. He added that it helps prevent a total supply blockage that could have resulted from excessive tariffs.
Apple stock currently holds a “Moderate Buy” consensus rating on Wall Street. This rating comes from 17 Buys, 12 Holds, and 4 Sells assigned by analysts over the past three months.
The average Apple price target stands at $242.61, suggesting a potential upside of 22.44% from current levels. Investors will be watching closely for any further developments in US-China trade relations.
