Apple, along with other US electronic stocks rose sharply Monday following the temporary exemption of new tariffs for Chinese imports.
Apple’s premarket trade was up 5.86%. Dell Technologies gained 6.26%. Super Micro Computer rose 5.2%. HP Inc. advanced 4%.
US Customs and Border Protection announced Friday that new tariffs would not be imposed on smartphones, computers and other electronic devices, except for a 20% specific duty related to the current fentanyl crackdown.
Alberto Gegra is an Equita analyst. He said that the removal of worst-case scenarios will provide support to the industry, at least for a short time.
The exemption, he said, prevents a possible near-total supply blockade that some feared would occur if tariffs on China had reached 100%.
Apple is the main beneficiary of investors’ attention as they look beyond lingering concerns
Even though the news is positive, there are still risks.
Over the weekend, both administration officials as well as President Donald Trump reiterated that targeted tariffs could be imposed on tech products in connection with a larger investigation of semiconductors.
Analysts and investors bet that such levies will likely be lower than the tariffs blanketed on Chinese imports. Some of these reached up to 145%.
Apple is the tech giant that appears to be the one who will benefit the most.
This company has been under intense scrutiny for its vulnerabilities in its supply chain. It assembles most of its products in China, but is also increasing production in India and Vietnam.
According to estimates, between 80 and 90 percent of iPhones still come from China.
Dan Ives is a former Apple analyst with Wedbush Securities. He said that the relief provided by Apple will give it time to recalibrate its operation.
Ives said that Apple has between 1-2 months in which to prepare its supply chain, and India is likely the main focus for increased iPhone production.
Apple’s thoughts after an euphoric tariff weekend
Apple has a breathing space that allows it to pass on steep increases in prices without immediately passing them onto US customers.
Ives said that the combined tariffs of Section 232 and base tariffs will fall to a “somewhat manageable” level in the short term. This would allow Apple to make any necessary adjustments.
He added that “Apple could chart a more clear path by passing on some of its costs to US customers while also absorbing a part of this impact in the supply chain.”
China’s talks will affect earnings outlook, but the long-term story remains intact
Ives predicts Apple could see its earnings decline by around 10% between 2025-2026, based on a worst-case scenario. This is due to softer demand and increased production costs.
If negotiations with China are stalled and the tariffs continue for several months, earnings could be hit by between 15 and 20 percent.
There is still room for optimism. Ives says that if progress is made on trade negotiations and tensions are eased by summer, the impact may be reduced to as little as 2%-5%.
His price target was $250 and he maintained his Outperform Rating on Apple Stock. This shows that he is confident in Apple’s prospects.
Ives stated that “we remain bullish” on Apple’s future story, noting its 1,5 billion iPhone users and 2.4 billion iOS-based devices installed, as well as its fast growing Services division.
Investors should look past the next three-month period and expect progress in the China front.
Apple’s price target is revised by analysts
Apple might find relief in the near future, but uncertainty lingers.
While Apple will likely be relieved in the near future, there is still uncertainty. Our bet remains on Apple, and Tim Cook. He may need to raise his four-year $500 billion US spending guarantee with the Trump Administration to avoid paying tariffs.
Reitzes maintained a Buy recommendation on Apple’s shares with a $226 price target.
Citi Research analyst Atif Mallik also struck the same tone. He said that Apple’s stock would be poised to rise after the exemption of tariffs, but cautioned, “Apple Products are not immune to a weak macro-environment.”
Malik has maintained his Buy recommendation on the stock, and set a $245 price-target.
KeyBanc Capital Markets’ Brandon Nispel said that Friday’s Apple announcement was “probably the worst-case scenario”, making his previous downside target of $150 unlikely to be met.
Nispel upgraded Apple shares from ‘underweight to sector weight’ on Monday. He warned that Apple’s slow AI progress and soft consumer spending continues to present challenges. The tech giant is “not out of the woods yet” in terms of its decline year to date.
The US Department of Justice antitrust lawsuit against Google could also threaten Apple’s estimated $20 billion in search revenues through the Safari browser.
It is hard to see the stock continuing its downward trend, he said. “The worst case scenario, an escalating tariff war, has been eliminated and the smartphones are exempt from the tariffs.”
Analysts at JPMorgan have revised their forecast, with the price of stock dropping from $270.00 down to $245.00 while maintaining an Overweight ranking.
The post Apple rallying as US tariff reprieve gives time to revamp supply chain may change as new developments unfold.
