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This Is How Apple (AAPL) Is Staying on Trump’s Good Side

This Is How Apple (AAPL) Is Staying on Trump’s Good Side

President Trump has openly said that he wants tech giant Apple (AAPL) to build iPhones in the U.S., but CEO Tim Cook is taking a different path. Instead of agreeing to move final iPhone assembly to the U.S., Cook joined Trump at the White House to announce a $600 billion investment over four years. This doesn’t include making iPhones entirely in the U.S., but it highlights Apple’s work with American companies that already make important parts like the glass and facial recognition sensors. Still, Cook explained that final assembly will continue to happen elsewhere.

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It is worth noting that the new “American Manufacturing Program” looks to help U.S. suppliers grow by strengthening Apple’s partnerships with them. For example, all cover glass for iPhones and Apple Watches will be made by Corning (GLW) in Kentucky, with Apple investing $2.5 billion in the effort. Apple also extended its deals with Texas-based companies like Coherent (COHR) and Texas Instruments (TXN), and said that it will be buying advanced chips from TSMC’s (TSM) Arizona factory, where Apple will be the main customer. In addition, Apple is expanding its U.S. data centers in North Carolina, Iowa, Nevada, and Oregon in order to support artificial intelligence.

Although the announcement pleased Trump and boosted Apple’s stock, analysts are unsure how much it will really impact Apple’s profits. Indeed, Apple hasn’t shared exact spending details, and most supplier agreements are confidential. Interestingly, experts believe that the $600 billion figure likely includes regular costs like payroll, Apple TV+ productions, and ongoing supplier payments. As a result, some see this move as a smart way for Apple to stay on Trump’s good side and avoid tariffs, without making big changes to its business model.

Is Apple a Buy or Sell Right Now?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on AAPL stock based on 15 Buys, 12 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average AAPL price target of $234.93 per share implies 4.1% upside potential.

See more AAPL analyst ratings

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