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Time of India
3 days ago
- Business
- Time of India
Apple shares face more pain as Trump's tariff threat looms
HighlightsApple Inc. shares have experienced their longest selloff in over three years, declining 22 per cent in 2025, amid escalating tariff threats from President Donald Trump, who has proposed a 25 per cent tariff on foreign-made smartphones if Apple does not move production to the United States. Analysts express skepticism regarding the actual implementation of the proposed tariffs, with some suggesting that if enforced, Apple may have to raise iPhone prices significantly, potentially by $250-$300, to maintain gross margins, which could lead to reduced consumer demand. The current political and economic climate has led to a reduction in earnings estimates for Apple Inc., with the consensus for net earnings in 2026 dropping by 5.1 per cent over the past three months, further complicating the company's financial outlook amidst ongoing trade uncertainties. Apple Inc. shares are coming off their longest selloff in more than three years, as escalating attacks from the White House threaten to further erode the company's profit outlook, suggesting the stock's struggles this year are far from over. President Donald Trump on Friday threatened to levy a 25% tariff on the company's products if it doesn't shift iPhone production to the US. Shares fell 3% to end the week, their eighth straight negative session, the longest such selloff since January 2022. Some analysts are skeptical that the tariffs will come to pass, but any movement in this direction will put the company in a position where it either has to absorb the higher costs, weighing on its earnings and margins, or pass along higher prices to consumers, which could erode demand at a time when Apple is already struggling with tepid growth and difficulties with its artificial intelligence offerings. 'The threat may be politically motivated but markets can't ignore the headline risk,' said Haris Khurshid, chief investment officer at Karobaar Capital. 'This kind of tariff rhetoric, even if it never materializes, chips away at investor confidence . You can't run a $3 trillion company with a trade grenade hanging overhead.' Apple is the worst-performing Magnificent Seven stock this year, and its 2025 drop of 22% stands in stark contrast to the 0.5% decline of the Nasdaq 100 Index. The stock has broken under key moving averages, but isn't yet at the level that would indicate oversold conditions, based on its 14-day relative strength index. The CBOE Apple VIX, which tracks a market estimate of future volatility for the stock, jumped more than 30% last week. The stock has endured political and tariff-related swings, though Friday's selloff was far milder than Apple's drop after the initial announcement of tariffs in April, when the stock underwent historic volatility, including its biggest four-day drop since October 2000. The Trump administration subsequently walked back several of its more extreme tariff pronouncements. It exempted key categories of electronics — including smartphones and computers — from its so-called reciprocal tariffs, while the US and China agreed to temporarily lower tariffs on each other's products. 'It would be probably a surprise to most investors if this actually happens,' Matt Stucky, chief portfolio manager of equities at Northwestern Mutual Wealth Management, said. He added that Friday's move in Apple shares underscored this point: if investors believed the 25% rate will be enforced, traders likely would have sent the stock down further. Trump's quickly evolving position was on display on Friday when, a few hours after taking aim at Apple on social media, he said the 25% tariff would apply to all foreign-made smartphones. Ironically, this could be to Apple's benefit, according to JPMorgan analyst Samik Chatterjee, who said that if all competitors in the industry face the same hurdle, 'Apple's pricing power with consumers as well as suppliers would position the company favorably relative to peers, rather than at a disadvantage.' Still, the situation is difficult for Apple because it has few obvious recourses to appease Trump. The idea of fully domestic iPhone manufacturing is 'a fairy tale that is not feasible,' according to Wedbush analyst Daniel Ives. Given the complexity of Apple's supply chain — including materials, assembly, labor, and machinery — Bloomberg Intelligence estimated it would take several quarters to move iPhone assembly to the US. Last month, Bank of America calculated that iPhone costs could rise 90% or more if they were made in the US. Apple was reportedly already considering price increases, though trying to avoid the perception they were related to tariffs, as Trump has also attacked companies that have raised prices due to the levies. Estimates vary on how significant tariffs could be to Apple. Bloomberg Intelligence estimated they 'might cut gross margin by 300-350 bps for fiscal 2026,' while Citigroup analyst Atif Malik estimated 'about 130 bps incremental gross margin impact, or 4% incremental EPS impact in FY26.' Wells Fargo Securities analyst Aaron Rakers is skeptical tariffs will materialize, but said Apple would have to raise prices by $250-$300 per iPhone in order to maintain gross margins. Ives at Wedbush said iPhones would cost about $3,500 if made in the US. Analysts have been trimming their estimates on account of the uncertainty. The consensus for Apple's net 2026 earnings has dropped by 5.1% over the past three months, while the view for revenue is down 3.9 per cent over the same period. Further cuts to estimates would have the effect of making the stock appear more expensive by shrinking the denominator in the price-to-earnings ratio. Apple currently trades around 26 times estimated earnings, above its 10-year average, and more than megacap peers that are expected to grow faster. The combination of a higher multiple and slower growth suggests a difficult setup, even outside of the tariff situation. 'We're in that ugly space because it's a bit of a no-win situation right now,' said Brian Mulberry, a client portfolio manager at Zacks Investment Management. 'There is probably a point where you can see the price becoming attractive enough for long-term investors,' but the valuation and uncertain backdrop means it isn't there yet.
Time of India
4 days ago
- Business
- Time of India
Apple shares face more pain as Trump's tariff threat looms
Apple Inc. shares are coming off their longest selloff in more than three years, as escalating attacks from the White House threaten to further erode the company's profit outlook, suggesting the stock's struggles this year are far from over. President Donald Trump on Friday threatened to levy a 25% tariff on the company's products if it doesn't shift iPhone production to the US. Shares fell 3% to end the week, their eighth straight negative session, the longest such selloff since January 2022. Some analysts are skeptical that the tariffs will come to pass, but any movement in this direction will put the company in a position where it either has to absorb the higher costs, weighing on its earnings and margins, or pass along higher prices to consumers, which could erode demand at a time when Apple is already struggling with tepid growth and difficulties with its artificial intelligence offerings. 'The threat may be politically motivated but markets can't ignore the headline risk,' said Haris Khurshid, chief investment officer at Karobaar Capital. 'This kind of tariff rhetoric, even if it never materializes, chips away at investor confidence. You can't run a $3 trillion company with a trade grenade hanging overhead.' Apple is the worst-performing Magnificent Seven stock this year, and its 2025 drop of 22% stands in stark contrast to the 0.5% decline of the Nasdaq 100 Index. The stock has broken under key moving averages, but isn't yet at the level that would indicate oversold conditions, based on its 14-day relative strength index. The CBOE Apple VIX, which tracks a market estimate of future volatility for the stock, jumped more than 30% last week. The stock has endured political and tariff-related swings, though Friday's selloff was far milder than Apple's drop after the initial announcement of tariffs in April, when the stock underwent historic volatility, including its biggest four-day drop since October 2000. The Trump administration subsequently walked back several of its more extreme tariff pronouncements. It exempted key categories of electronics — including smartphones and computers — from its so-called reciprocal tariffs, while the US and China agreed to temporarily lower tariffs on each other's products. 'It would be probably a surprise to most investors if this actually happens,' Matt Stucky, chief portfolio manager of equities at Northwestern Mutual Wealth Management, said. He added that Friday's move in Apple shares underscored this point: if investors believed the 25% rate will be enforced, traders likely would have sent the stock down further. Trump's quickly evolving position was on display on Friday when, a few hours after taking aim at Apple on social media, he said the 25% tariff would apply to all foreign-made smartphones. Ironically, this could be to Apple's benefit, according to JPMorgan analyst Samik Chatterjee, who said that if all competitors in the industry face the same hurdle, 'Apple's pricing power with consumers as well as suppliers would position the company favorably relative to peers, rather than at a disadvantage.' Still, the situation is difficult for Apple because it has few obvious recourses to appease Trump. The idea of fully domestic iPhone manufacturing is 'a fairy tale that is not feasible,' according to Wedbush analyst Daniel Ives. Given the complexity of Apple's supply chain — including materials, assembly, labor, and machinery — Bloomberg Intelligence estimated it would take several quarters to move iPhone assembly to the US. Last month, Bank of America calculated that iPhone costs could rise 90% or more if they were made in the US. Apple was reportedly already considering price increases, though trying to avoid the perception they were related to tariffs, as Trump has also attacked companies that have raised prices due to the levies. Estimates vary on how significant tariffs could be to Apple. Bloomberg Intelligence estimated they 'might cut gross margin by 300-350 bps for fiscal 2026,' while Citigroup analyst Atif Malik estimated 'about 130 bps incremental gross margin impact, or 4% incremental EPS impact in FY26.' Wells Fargo Securities analyst Aaron Rakers is skeptical tariffs will materialize, but said Apple would have to raise prices by $250-$300 per iPhone in order to maintain gross margins. Ives at Wedbush said iPhones would cost about $3,500 if made in the US. Analysts have been trimming their estimates on account of the uncertainty. The consensus for Apple's net 2026 earnings has dropped by 5.1% over the past three months, while the view for revenue is down 3.9% over the same period. Further cuts to estimates would have the effect of making the stock appear more expensive by shrinking the denominator in the price-to-earnings ratio. Apple currently trades around 26 times estimated earnings, above its 10-year average, and more than megacap peers that are expected to grow faster. The combination of a higher multiple and slower growth suggests a difficult setup, even outside of the tariff situation. 'We're in that ugly space because it's a bit of a no-win situation right now,' said Brian Mulberry, a client portfolio manager at Zacks Investment Management. 'There is probably a point where you can see the price becoming attractive enough for long-term investors,' but the valuation and uncertain backdrop means it isn't there yet.
Yahoo
4 days ago
- Business
- Yahoo
Trump Just Threatened Apple's iPhones -- Could This Be the $3,500 iPhone Apocalypse?
Apple (NASDAQ:AAPL) is slipping deeper into the red. Shares dropped another 3% Fridaymarking the eighth straight losing sessionas Trump reignited trade war fears with a not-so-subtle threat: move iPhone production to the U.S. or get hit with a 25% tariff. That bombshell added fresh weight to an already heavy year for Apple, whose stock is now down 22% in 2025, the worst performance among the Magnificent Seven. Even if the tariff never lands, markets are reacting to the uncertainty. Volatility spiked last week, with the CBOE Apple VIX jumping more than 30%, and investors are starting to question how much more pain might be ahead. For now, it's a no-win setup. Apple either absorbs higher costswhich would crush marginsor passes them on to customers and risks killing demand. Bloomberg Intelligence thinks tariffs could slice 300 to 350 basis points off gross margins in fiscal 2026. Wells Fargo estimates Apple would need to hike iPhone prices by $250$300 just to maintain profitability. And Wedbush's Dan Ives put a brutal number on it: $3,500 per iPhone if they were made in the U.S.a scenario he called pure fantasy. Analysts across the board are trimming forecasts. Earnings estimates for 2026 have dropped 5.1% in the last three months, while revenue expectations are down 3.9%. So where does that leave investors? Stuck in limbo. The stock is now trading at 26x forward earningsabove its 10-year averageeven as its growth outlook softens and AI momentum stalls. JPMorgan says Apple could still hold a pricing edge if all smartphone makers face the same tariff, but that's not exactly a margin of safety. It's like catching a falling knife right now, said Zacks' Brian Mulberry. Until there's more clarity on policyand Apple's next real growth catalystinvestors may just be along for the ride, hoping the blade doesn't cut too deep. This article first appeared on GuruFocus.
Yahoo
4 days ago
- Business
- Yahoo
Apple Shares Face More Pain as Trump's Tariff Threat Looms
(Bloomberg) — Apple Inc (AAPL). shares are coming off their longest selloff in more than three years, as escalating attacks from the White House threaten to further erode the company's profit outlook, suggesting the stock's struggles this year are far from over. NY Private School Pleads for Donors to Stay Open After Declaring Bankruptcy UAE's AI University Aims to Become Stanford of the Gulf NYC's War on Trash Gets a Glam Squad Pacific Coast Highway to Reopen Near Malibu After January Fires President Donald Trump on Friday threatened to levy a 25% tariff on the company's products if it doesn't shift iPhone production to the US. Shares fell 3% to end the week, their eighth straight negative session, the longest such selloff since January 2022. Some analysts are skeptical that the tariffs will come to pass, but any movement in this direction will put the company in a position where it either has to absorb the higher costs, weighing on its earnings and margins, or pass along higher prices to consumers, which could erode demand at a time when Apple is already struggling with tepid growth and difficulties with its artificial intelligence offerings. 'The threat may be politically motivated but markets can't ignore the headline risk,' said Haris Khurshid, chief investment officer at Karobaar Capital. 'This kind of tariff rhetoric, even if it never materializes, chips away at investor confidence. You can't run a $3 trillion company with a trade grenade hanging overhead.' Apple is the worst-performing Magnificent Seven stock this year, and its 2025 drop of 22% stands in stark contrast to the 0.5% decline of the Nasdaq 100 Index. The stock has broken under key moving averages, but isn't yet at the level that would indicate oversold conditions, based on its 14-day relative strength index. The CBOE Apple VIX, which tracks a market estimate of future volatility for the stock, jumped more than 30% last week. The stock has endured political and tariff-related swings, though Friday's selloff was far milder than Apple's drop after the initial announcement of tariffs in April, when the stock underwent historic volatility, including its biggest four-day drop since October 2000. The Trump administration subsequently walked back several of its more extreme tariff pronouncements. It exempted key categories of electronics — including smartphones and computers — from its so-called reciprocal tariffs, while the US and China agreed to temporarily lower tariffs on each other's products. 'It would be probably a surprise to most investors if this actually happens,' Matt Stucky, chief portfolio manager of equities at Northwestern Mutual Wealth Management, said. He added that Friday's move in Apple shares underscored this point: if investors believed the 25% rate will be enforced, traders likely would have sent the stock down further. Trump's quickly evolving position was on display on Friday when, a few hours after taking aim at Apple on social media, he said the 25% tariff would apply to all foreign-made smartphones. Ironically, this could be to Apple's benefit, according to JPMorgan analyst Samik Chatterjee, who said that if all competitors in the industry face the same hurdle, 'Apple's pricing power with consumers as well as suppliers would position the company favorably relative to peers, rather than at a disadvantage.' Still, the situation is difficult for Apple because it has few obvious recourses to appease Trump. The idea of fully domestic iPhone manufacturing is 'a fairy tale that is not feasible,' according to Wedbush analyst Daniel Ives. Given the complexity of Apple's supply chain — including materials, assembly, labor, and machinery — Bloomberg Intelligence estimated it would take several quarters to move iPhone assembly to the US. Last month, Bank of America calculated that iPhone costs could rise 90% or more if they were made in the US. Apple was reportedly already considering price increases, though trying to avoid the perception they were related to tariffs, as Trump has also attacked companies that have raised prices due to the levies. Estimates vary on how significant tariffs could be to Apple. Bloomberg Intelligence estimated they 'might cut gross margin by 300-350 bps for fiscal 2026,' while Citigroup analyst Atif Malik estimated 'about 130 bps incremental gross margin impact, or 4% incremental EPS impact in FY26.' Wells Fargo Securities analyst Aaron Rakers is skeptical tariffs will materialize, but said Apple would have to raise prices by $250-$300 per iPhone in order to maintain gross margins. Ives at Wedbush said iPhones would cost about $3,500 if made in the US. Analysts have been trimming their estimates on account of the uncertainty. The consensus for Apple's net 2026 earnings has dropped by 5.1% over the past three months, while the view for revenue is down 3.9% over the same period. Further cuts to estimates would have the effect of making the stock appear more expensive by shrinking the denominator in the price-to-earnings ratio. Apple currently trades around 26 times estimated earnings, above its 10-year average, and more than megacap peers that are expected to grow faster. The combination of a higher multiple and slower growth suggests a difficult setup, even outside of the tariff situation. 'We're in that ugly space because it's a bit of a no-win situation right now,' said Brian Mulberry, a client portfolio manager at Zacks Investment Management. 'There is probably a point where you can see the price becoming attractive enough for long-term investors,' but the valuation and uncertain backdrop means it isn't there yet. 'You're trying to catch a falling knife right now,' he said. Tech Chart of the Day BYD Co. shares extended losses in Hong Kong trading Tuesday — taking their two-day slide to more than 10% — as last week's sweeping price cuts stoked concern of another wave of discounting in China's cutthroat electric car market. Top Tech Stories Samsung Electronics Co.'s investment arm is among a group of firms seeking to invest in US health-care software and device company Exo Imaging Inc., according to people familiar with the matter. OpenAI has established a legal entity in South Korea, seeking to propel further adoption of its artificial intelligence technologies. Salesforce Inc. is in talks to acquire software company Informatica Inc., rebooting a pursuit that fell through last year, people familiar with the matter said. A union has been certified at a Whole Foods Market store in Philadelphia, marking a US first for the Inc. grocery chain. Earnings Due Tuesday Earnings Postmarket: Box Inc. (BOX US) Okta Inc. (OKTA US) Semtech Corp. (SMTC US) —With assistance from Subrat Patnaik. Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? Why Apple Still Hasn't Cracked AI Inside the First Stargate AI Data Center How Coach Handbags Became a Gen Z Status Symbol AI Is Helping Executives Tackle the Dreaded Post-Vacation Inbox ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
4 days ago
- Business
- Yahoo
Apple Shares Face More Pain as Trump's Tariff Threat Looms
(Bloomberg) — Apple Inc (AAPL). shares are coming off their longest selloff in more than three years, as escalating attacks from the White House threaten to further erode the company's profit outlook, suggesting the stock's struggles this year are far from over. NY Private School Pleads for Donors to Stay Open After Declaring Bankruptcy UAE's AI University Aims to Become Stanford of the Gulf NYC's War on Trash Gets a Glam Squad Pacific Coast Highway to Reopen Near Malibu After January Fires President Donald Trump on Friday threatened to levy a 25% tariff on the company's products if it doesn't shift iPhone production to the US. Shares fell 3% to end the week, their eighth straight negative session, the longest such selloff since January 2022. Some analysts are skeptical that the tariffs will come to pass, but any movement in this direction will put the company in a position where it either has to absorb the higher costs, weighing on its earnings and margins, or pass along higher prices to consumers, which could erode demand at a time when Apple is already struggling with tepid growth and difficulties with its artificial intelligence offerings. 'The threat may be politically motivated but markets can't ignore the headline risk,' said Haris Khurshid, chief investment officer at Karobaar Capital. 'This kind of tariff rhetoric, even if it never materializes, chips away at investor confidence. You can't run a $3 trillion company with a trade grenade hanging overhead.' Apple is the worst-performing Magnificent Seven stock this year, and its 2025 drop of 22% stands in stark contrast to the 0.5% decline of the Nasdaq 100 Index. The stock has broken under key moving averages, but isn't yet at the level that would indicate oversold conditions, based on its 14-day relative strength index. The CBOE Apple VIX, which tracks a market estimate of future volatility for the stock, jumped more than 30% last week. The stock has endured political and tariff-related swings, though Friday's selloff was far milder than Apple's drop after the initial announcement of tariffs in April, when the stock underwent historic volatility, including its biggest four-day drop since October 2000. The Trump administration subsequently walked back several of its more extreme tariff pronouncements. It exempted key categories of electronics — including smartphones and computers — from its so-called reciprocal tariffs, while the US and China agreed to temporarily lower tariffs on each other's products. 'It would be probably a surprise to most investors if this actually happens,' Matt Stucky, chief portfolio manager of equities at Northwestern Mutual Wealth Management, said. He added that Friday's move in Apple shares underscored this point: if investors believed the 25% rate will be enforced, traders likely would have sent the stock down further. Trump's quickly evolving position was on display on Friday when, a few hours after taking aim at Apple on social media, he said the 25% tariff would apply to all foreign-made smartphones. Ironically, this could be to Apple's benefit, according to JPMorgan analyst Samik Chatterjee, who said that if all competitors in the industry face the same hurdle, 'Apple's pricing power with consumers as well as suppliers would position the company favorably relative to peers, rather than at a disadvantage.' Still, the situation is difficult for Apple because it has few obvious recourses to appease Trump. The idea of fully domestic iPhone manufacturing is 'a fairy tale that is not feasible,' according to Wedbush analyst Daniel Ives. Given the complexity of Apple's supply chain — including materials, assembly, labor, and machinery — Bloomberg Intelligence estimated it would take several quarters to move iPhone assembly to the US. Last month, Bank of America calculated that iPhone costs could rise 90% or more if they were made in the US. Apple was reportedly already considering price increases, though trying to avoid the perception they were related to tariffs, as Trump has also attacked companies that have raised prices due to the levies. Estimates vary on how significant tariffs could be to Apple. Bloomberg Intelligence estimated they 'might cut gross margin by 300-350 bps for fiscal 2026,' while Citigroup analyst Atif Malik estimated 'about 130 bps incremental gross margin impact, or 4% incremental EPS impact in FY26.' Wells Fargo Securities analyst Aaron Rakers is skeptical tariffs will materialize, but said Apple would have to raise prices by $250-$300 per iPhone in order to maintain gross margins. Ives at Wedbush said iPhones would cost about $3,500 if made in the US. Analysts have been trimming their estimates on account of the uncertainty. The consensus for Apple's net 2026 earnings has dropped by 5.1% over the past three months, while the view for revenue is down 3.9% over the same period. Further cuts to estimates would have the effect of making the stock appear more expensive by shrinking the denominator in the price-to-earnings ratio. Apple currently trades around 26 times estimated earnings, above its 10-year average, and more than megacap peers that are expected to grow faster. The combination of a higher multiple and slower growth suggests a difficult setup, even outside of the tariff situation. 'We're in that ugly space because it's a bit of a no-win situation right now,' said Brian Mulberry, a client portfolio manager at Zacks Investment Management. 'There is probably a point where you can see the price becoming attractive enough for long-term investors,' but the valuation and uncertain backdrop means it isn't there yet. 'You're trying to catch a falling knife right now,' he said. Tech Chart of the Day BYD Co. shares extended losses in Hong Kong trading Tuesday — taking their two-day slide to more than 10% — as last week's sweeping price cuts stoked concern of another wave of discounting in China's cutthroat electric car market. Top Tech Stories Samsung Electronics Co.'s investment arm is among a group of firms seeking to invest in US health-care software and device company Exo Imaging Inc., according to people familiar with the matter. OpenAI has established a legal entity in South Korea, seeking to propel further adoption of its artificial intelligence technologies. Salesforce Inc. is in talks to acquire software company Informatica Inc., rebooting a pursuit that fell through last year, people familiar with the matter said. A union has been certified at a Whole Foods Market store in Philadelphia, marking a US first for the Inc. grocery chain. Earnings Due Tuesday Earnings Postmarket: Box Inc. (BOX US) Okta Inc. (OKTA US) Semtech Corp. (SMTC US) —With assistance from Subrat Patnaik. Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? Why Apple Still Hasn't Cracked AI Inside the First Stargate AI Data Center How Coach Handbags Became a Gen Z Status Symbol AI Is Helping Executives Tackle the Dreaded Post-Vacation Inbox ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
