Shareholder warns Apple's $100 billion investment is more optics than impact

Yahoo

20 hours ago

Apple (AAPL) is courting President Trump with a fresh $100 billion manufacturing push, but it's questionable whether the move will deliver real gains for shareholders.
"I'd be very careful not to confuse good politics with what is actually going to happen in the operations of this business," Ann Berry, founder of Threadneedle and an Apple shareholder, said on Yahoo Finance's Opening Bid.
On Wednesday, the tech giant announced a $100 billion commitment to US manufacturing. CEO Tim Cook was in the White House for the unveiling, where President Trump also announced a 100% tariff on semiconductors produced overseas unless the company commits to building in the US.
"The good news for companies like Apple is, if you're building in the United States, or have committed to build, without question, committed to build in the United States, there will be no charge," Trump said.
Read more: The latest news and updates on Trump's tariffs
Apple's shares rose by 3% on Thursday, although the stock has traded 12% lower year to date as investors remain concerned the company is falling behind in the AI race.
Berry noted that Cook's political engagement benefits shareholders in that it's "fostering relationships with powerful decision-makers." But investors shouldn't confuse Cook's political goodwill with real impact.
For investors, the key question is whether Apple's investment will meaningfully reduce its tariff risk. While Apple has moved some iPhone assembly to India and explored alternatives like Vietnam, the company's semiconductor packaging and most of its core hardware production still rely on Chinese factories.
Berry emphasized that building out domestic capacity, especially at Apple's scale, will take years. The timeline to secure permits, construct factories, hire and train workers, and begin mass production likely exceeds the next three and a half years, she noted. Additionally, tariffs could shift within that period.
"I highly doubt that Apple is going to start breaking ground on as much new kind of land," Berry said, which means it may not meaningfully change Apple's near-term supply chain exposure.
Despite the cautious outlook, some on Wall Street cheered the news. Bank of America analyst Wamsi Mohan raised the firm's price target from $213 to $250, citing the upside potential if the company is exempt from tariffs.
Mohan suggests that if the US government grants Apple an exemption, the company might reduce its projected fourth quarter headwinds of $1.1 billion, although the precise details remain undefined. This action could also bolster confidence in Apple's gross margin expansion, which Bank of America anticipates will reach 50%.
The firm also notes that if rivals like Samsung (SSNLF) or Google (GOOG) face steep import tariffs while Apple remains exempt, it could tip US market share further in Apple's favor, potentially boosting iPhone sales.
Francisco Velasquez is a Reporter at Yahoo Finance. He can be reached on LinkedIn and X, or via email at [e-mail].