A Wall Street analyst who has been bullish on Apple stock slashed his price target on the consumer electronics giant over President Donald Trump's "tariff Armageddon."
Wedbush Securities analyst Daniel Ives kept his outperform rating on Apple stock but cut his 12-month price target to 250 from 325.
On the stock market today, Apple stock retreated 3.7% to close at 181.46.
Last week, Apple tumbled 15.9% over two trading sessions after Trump announced his "Liberation Day" tariffs on imports late Wednesday.
"The tariff economic Armageddon unleashed by Trump is a complete disaster for Apple given its massive China production exposure," Ives said in a client note Sunday. "In our view, no U.S. tech company is more negatively impacted by these tariffs than Apple with 90% of iPhones produced and assembled in China."
Last week, Wall Street analysts speculated that there was only a slim chance that Apple could get an exemption on tariffs from the Trump administration.
While Apple has worked to diversify its supply chain, it is still heavily reliant on contract manufacturers in China. In addition to making most of its iPhones there, Apple gets over 50% of its Mac computers and 75%-80% of iPad tablets from China, Ives estimated.
Tech Firms Might Skip Guidance
While Trump may want to encourage more manufacturing in the U.S., that's just not practicable for Apple's consumer products, Ives said.
"The reality is it would take three years and $30 billion in our estimation to move even 10% of its supply chain from Asia to the U.S. with major disruption in the process," he said.
With first-quarter earnings season starting, tech companies are unlikely to give concrete guidance given uncertainty over the Trump tariffs, Ives said.
"The sheer uncertainty of this tariff announcement will cause demand destruction for consumers globally (recession fears, etc.) and the price consequences of this tariff action are hard to grasp and model," Ives said.
Melius Research analyst Ben Reitzes also believes that companies will forgo guidance in their Q1 reports. In a client note, he compared the Trump tariffs to other "market shocks" like 9/11, the global financial crisis and the Covid pandemic.
Apple Stock Is On Tech Leaders List
One unknown is how much tech hardware companies will raise prices in the U.S. because of the tariffs, Reitzes said.
"We are already hearing about 20% increases in U.S. prices for x86 servers and PCs and some networking and know that many customers will just walk away from projects at these levels," Reitzes said. "Apple could see a huge margin hit of several hundreds of basis points in the USA — so they are almost sure to raise prices if tariffs ensue."
Reitzes rates Apple stock as buy with a price target of 226.
Meanwhile, Apple stock is still on the IBD Tech Leaders list.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
