Apple shares rebounded on Tuesday after days of relentless sales that saw the market value of the tech giant plummet by $638 billion. Investors appeared to find comfort in hints that trade negotiations could ease tensions.
The stock rose 4.5% in early trading, but later in the day it lost most of its gains and only grew by 1.7%.
The surge was accompanied by relief in broader US markets, as hopes were pinned on future diplomatic overtures to cool the increasingly aggressive rhetoric of the Trump administration.
Apple’s rebound, however, is still set against a larger backdrop of ongoing challenges.
The stock has dropped nearly 14% in the last five days, and almost 17% in the past month.
Apple’s exposure in China puts it at the center of the trade war, with analysts warning the company’s supply chains are among the most vulnerable in the tech industry.
China has also retaliated against US tariffs by levying 34% on American goods. This has further escalated trade tensions, even as other countries are reaching out to the US to negotiate.
Apple’s stock has also been affected by the postponement of some Siri features in Apple intelligence.
Analysts see silver linings in Apple’s battered value
Apple is still a bullish investment for some Wall Street voices, despite the turmoil.
Bank of America Securities reiterated on Tuesday its buy rating for Apple shares. The firm maintained a $250 price target.
The firm argued the sharp drop in the stock price presents an “especially enhanced buying opportunity” to investors, since the price-to-earnings ratio has fallen below the 25-times threshold that the bank considers favorable.
Bank of America says that the steep drop in Apple’s share price is “a great opportunity for investors to buy a name of high quality.”
BofA highlighted Apple’s strong cash flows, earnings stability, and the potential upside of integrating artificial intelligence in its devices.
The firm believes that these factors support a positive balance between risk and reward for the stock’s current levels.
BofA stated that “while near-term volatility will likely persist, Apple’s strong fundamentals and attractive valuation make it a compelling investment for long-term investors.”
Apple stock: supply-chain risks and pricing pressures
Not all analysts are as optimistic.
Daniel Ives, a longtime Apple bull at Wedbush Securities lowered his price target for the company from $325 to $25, citing President Trump’s “tariff Armageddon.”
He acknowledged Apple’s efforts in diversifying manufacturing to countries such as India, Vietnam, Thailand, and more, but warned that as much as 80% or its iPads still come out of China.
Ives, a tech industry veteran, warned that it would take Apple three years and $30 billion in order to move 10% of its supply chain from Asia. He highlighted the logistical and financial difficulties the company faces.
Ben Reitzes, of Melius Research, drew parallels between the tariff shocks and past market crises like the 2008 financial meltdown or the Covid pandemic.
He warned that companies could be forced to raise US prices up to 20% to offset the impact of tariffs, which would alienate price-sensitive consumers.
Reitzes warned that Apple could suffer a margin hit of hundreds of basis points in the US, but maintained a buy rating and a $226 price target.
Tariffs will almost certainly increase prices.
This post Apple’s resurgence and struggles to stabilize is a ‘buying opportunity enhanced’ by analysts may be modified with updates.
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