Clouds Share About Apple's Stock - For Now

Copyright © HT Digital Streams Limit all rights reserved. Dan Gallagher, The Wall Street Journal 4 min Read 14 Apr 2025, 04:30 pm There will be continued uncertainty about Apple’s stock. Photo: Hector Retamal/Agence France-Presses/Getty Images Summary Summary Weekend exemptions saved the iPhone Titan, but Apple is now at the mercy of Trump. Apple just avoided a large bullet. There will be more. Late Friday news broke from an exemption for smartphones, laptops and other electronics imported from China, which saved Apple from most of drastic rates set by President Trump. Those rates – announced on April 2 and the following week – would have significantly increased Apple’s costs and either its important profit margins or the required price increases for customers who already pay $ 1000 or more for the latest iPhones. Both were unattractive prospects-especially during a year in which Apple is already struggling to sell its latest iPhones and launch new generative artificial intelligence services for its devices. Shares in the world’s most valuable company have been hammered. Even after a setback in the market after Trump’s look back from some rates, Apple’s share fell almost 12% last week from where it was before the initial tariff announcement. The other five megacap technology names were on average only 2%. Apple’s shares are likely to be lost on Monday, given the latest exemptions. Nevertheless, investors should not accept that it does business again as usual. It became clear even before the weekend was over, after Handard’s secretary Lutnick said on Sunday that more rates could soon be on electronic products. Trump himself said in a social media post later Sunday that “no one” comes off the hook “on rates. The continued uncertainty will hang over Apple’s stock, which raises the question of whether it can – or even – regain the previous, rich valuation. In the future, Apple’s multiple will have to reflect a Trump downtake. This will have to take into account the incredible leverage that the administration now has about the company and head of Tim Cook. Each administration pronunciation from this point will have the potential to raise the existential crisis that has gripped Apple over the past two weeks. And it is an administration that is still interested in the production of everything designed by US businesses. To try to do this at Apple would effectively set back the clock with 20 years – the annual statement of the company submitted in 2005 was the first to claim that the final meeting of ‘essentially’ of the products he sold took place in China. The shift was the highlight of years of trouble by supply chain tailor Cook, and it did well before becoming Apple CEO in 2011. Apple’s annual gross margins were on average in the low 20% range in the early 2000s, when it was predominantly a computer business that made products in California and Ireland. The margins hit 40% by the end of that decade, after the iPhone-in-China IPHone and iPod also transferred Apple’s business. Friday’s releases can diversify the pressure that Apple is just facing its manufacturing base. And it will be an expensive shift, even if it does not eventually result in more than a million US workers compiling iPhones for American wages. China has strong competitive benefits in manufacturing. This is why Apple and almost all of its technical hardware counterparts outsource most of their production there. “The reality is that major US technology companies remain very dependent on China’s extremely efficient and deeply integrated manufacturing ecosystem,” said IDC analyst Francisco Jeronimo. “For high -volume products such as smartphones, tablets or computers, any attempt at quick diversification would be expensive and logistically unenforceable.” The Trump administration’s new -found swing about Apple can also play in other ways. For example, the government has been unsuccessfully trying to exercise Apple a ‘back door’ in its software to give law enforcement easier access to its devices. The company’s determination on this front can be freshly tested, although cavity can harm its image in customers and may affect long -term growth. This new, less predictable reality must be reflected in Apple’s valuation. The share is trading about 29 times projected earnings for this year before Trump’s tariff announcement. The multiple was before most other Megacap technology stocks and more than twice the superior ordered by hardware manufacturers such as Samsung, Dell and HP. Apple has long warned a premium for its gadget counterparts, given its excellent cash flow and margins. It is harder to justify under a US president who is conducting a trade war – and is willing to use any way to do so. A US-based company that sells more than $ 300 billion to foreign-manufactured products each year is not suitable for a world facing deglobalization. Apple’s shares will eventually have to reflect this. Write to Dan Gallagher at [email protected], catch all the corporate news and updates on live currency. Download the Mint News app to get daily market updates and live business news. More Topics #Pleple Inc Mint Specials