The issue of where consumer electronics giant Apple (AAPL) would produce those consumer electronics is a thorny one, and has been thorny for some time now. New reports show just how far and wide the thorns extend, as Trump advisor Peter Navarro called out Apple for moving too slowly in getting production out of China. The rebuke proved scathing to even shareholders, who sent shares down over 1.5% in Monday afternoon’s trading.
Don’t Miss TipRanks’ Half-Year Sale
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
- Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
There is a lot at stake in determining production locations; while Apple is looking to get out of China, the Trump Administration wants Apple coming back to the United States, with President Trump reportedly telling Apple CEO Tim Cook: “I don’t want you building in India.” But with supply chain analysts declaring that a wholly United States-made iPhone could cost upward of $3,500, it is also the kind of thing that Apple is trying to balance.
This in turn led to Navarro noting: “With all these new advanced manufacturing techniques and the way things are moving with AI and things like that, it’s inconceivable to me that Tim Cook could not produce his iPhones elsewhere around the world and in this country.” Indeed, “in this country” proved a tall order; Apple recently announced plans to put $500 billion worth of investment in to the United States, including the assembly of some AI servers.
An AI Boost
Apple’s work—or lack thereof—in artificial intelligence (AI) has left investors piqued over the last few months. But there are signs that Apple is looking to augment its presence in AI, as evidenced by reported plans to buy two new firms: TrueMeeting and WhyLabs.
With TrueMeeting, Apple gets access to software that allows users to produce a “hyper-realistic digital twin” of the user for use as an avatar in meetings. This works especially well for those whose cameras or internet connections do not do well with live video meetings. Meanwhile, WhyLabs works to inject some mental health into AI systems, working to prevent “…drift and performance degradations,” sometimes known as “hallucinations.”
Is Apple a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on AAPL stock based on 15 Buys, 10 Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 6.26% loss in its share price over the past year, the average AAPL price target of $226.36 per share implies 7.69% upside potential.
