TLDR:
- Apple stock rose 9.20% over the past week, with a 4.06% gain on Friday to $198.15
- US Customs and Border Protection announced smartphones and other electronics will be exempt from Trump’s tariffs
- Apple has been diversifying by moving iPhone production to India to reduce China dependency
- Wedbush analyst Dan Ives had warned Apple was “in the eye of this storm” before exemptions
- Despite exemptions, analysts note “clear uncertainty and volatility ahead” in China negotiations
Apple’s stock has enjoyed a strong week, climbing 9.20% as investors reacted positively to news that the company would be spared from the worst of President Trump’s new tariffs on Chinese goods.
The tech giant saw its shares rise 4.06% on Friday alone, closing at $198.15 after the U.S. Customs and Border Protection published guidance exempting smartphones, laptop computers, memory chips and other electronics from the tariffs.
This comes as welcome news for Apple, which had faced a grim outlook just days earlier. Wedbush analyst Dan Ives had warned that Apple was “in the eye of this storm,” since approximately 90% of iPhones are produced and assembled in China.
Ives had cautioned that without exemptions, Apple would have “no choice but to price iPhones at $2k+ if these tariffs stick for more than a few weeks.” Such price hikes could have severely damaged consumer demand.
The exemptions announced Friday evening will shield smartphones, laptop computers, memory chips and other electronics from Trump’s 125% China tariff and his 10% baseline tariff on countries worldwide.
Industry Response and Political Pressure
The tech industry’s reaction to the initial tariff announcement had been swift and concerned. Many analysts pointed out the potential devastating effects on supply chains that are heavily dependent on Chinese manufacturing.
“The US tech industry has a loud voice and despite initial strong pushback against exemptions within the White House, the reality of the situation was finally recognized in the Beltway,” Ives noted in a Saturday research note.
President Trump had hinted at the exemptions on Friday night while speaking to reporters aboard Air Force One. He suggested there “could be a couple of exceptions for obvious reasons,” while maintaining that “10% is a floor” for tariffs.
Other tech companies also benefited from the news. Nvidia rose 3.2% to $110.93, while Dell Technologies gained 3.8% on Friday ahead of the official tariff decision announcement.
Supply Chain Diversification
Even before the tariff exemption news, Apple had been working to reduce its dependency on China. The company has been actively moving portions of its iPhone production to India.
This strategic shift serves multiple purposes. It helps Apple take advantage of India’s favorable tariffs and incentives while creating a more resilient supply chain in an increasingly unpredictable geopolitical landscape.
The diversification effort is part of Apple’s long-term strategy to mitigate risks associated with trade tensions and potential future tariffs. Analysts believe this approach could help Apple reduce production costs and protect profit margins.
Remaining Challenges
Despite the tariff exemptions, Apple still faces challenges. Other tariffs will continue to apply to electronics and smartphones, including a 20% tariff the Trump administration had applied earlier this year on Chinese goods.
“There is still clear uncertainty and volatility ahead with these China negotiations,” Ives cautioned in his latest research note, suggesting that the current relief might be temporary depending on how trade talks progress.
Apple’s robust services business, which generated $96 billion last year, provides some cushion against these external pressures. This growing segment has become increasingly important to the company’s overall financial health.
Investor sentiment remains cautiously optimistic, with Apple receiving a “Moderate Buy” consensus from analysts. The average price target for Apple shares suggests potential upside, reflecting confidence in the company’s ability to navigate current challenges.
Market experts remind investors that market cycles inevitably bring periods of volatility. James “Rev Shark” DePorre points to the Pareto Principle, noting that “80% of the time, you won’t make much money in the stock market.”
DePorre suggests that investors should “embrace that fact rather than fight it,” understanding that “the one great certainty of all markets is cycles of ups and downs.”
The cyclical nature of markets means periods of difficulty are to be expected. “The best way to deal with the stress and anxiety of difficult markets like the one we are currently experiencing is to simply recognize that this is one of those periods when we aren’t going to make money,” DePorre advised.
As Apple continues to adapt its global strategy, investors are closely monitoring how these tariff exemptions and supply chain changes will impact the company’s financial performance and stock price in the coming months.
