Apple’s stock (AAPL) took a sharp dive after President Donald Trump’s latest tariff announcement, with shares plummeting 8.1% in late-morning trading. This made the tech giant the worst performer among the Magnificent Seven, a group of top tech stocks including Microsoft (MSFT), Meta Platforms (META), Alphabet (GOOGL), Amazon (AMZN), Nvidia (NVDA), and Tesla (TSLA). But what’s causing this sudden drop, and why is Apple bearing the brunt?
Apple’s Deep Ties to China Expose It to Major Risks
The crux of Apple’s troubles lies in its deep integration with the global economy. The company relies heavily on China, both for manufacturing and as a major market for its products. Between 90% and 95% of Apple’s products are produced in China, primarily by Foxconn, the largest iPhone manufacturer in the world. The new tariffs—expected to hit Chinese-made goods with a combined 54% levy—put Apple in a particularly vulnerable position.
Though Apple has expanded production to countries like Vietnam and India, tariffs still loom over those regions, with a 46% rate for Vietnamese exports and 27% for goods from India. These wide-reaching tariffs not only threaten the company’s supply chain but also pose a risk to demand for its products globally.
Apple Faces Potential Profit Hit and Demand Threat
Analysts are concerned about the financial fallout from these tariffs. Jefferies analyst Edison Lee pointed out that if all of Apple’s iPhones made in China and exported to the U.S. were subject to the 54% tariff, and if Apple absorbed the hit instead of passing it on to consumers, it could reduce its Fiscal 2025 net profit by 14%. The company’s international exposure is another risk. With 64% of its revenue coming from outside the U.S., foreign governments may retaliate with their own tariffs or even boycotts.
Apple’s services—like the App Store and iCloud—could also feel the sting of rising foreign tax rates as governments respond to the trade war. As it stands, Apple’s stock is under intense pressure, and with no clarity on whether the company will receive tariff exemptions, the outlook remains up in the air.
Is Apple a Buy, Sell, or Hold?
Analysts remain cautiously optimistic about AAPL stock, with a Moderate Buy consensus rating based on 17 Buys, 11 Holds, and four Sells. Over the past year, AAPL has increased by just over 20%, and the average AAPL price target of $250.71 implies an upside potential of 22% from current levels.
