In a chaotic weekend that left tech investors scrambling for clarity, the White House appeared to offer - and then swiftly blur - a reprieve from its latest round of tariffs.
What began on Friday night with apparent exemptions for smartphones, semiconductors and tech components ended on Sunday with officials insisting those exemptions weren’t exemptions after all, just tweaks to the way tariffs are categorised.
That back-and-forth was closely watched in Cupertino. Apple Inc (NASDAQ:AAPL, ETR:APC), like many of its peers, is heavily exposed to Chinese supply chains and has been staring down the barrel of tariffs that could have pushed iPhone prices over $2,000.
According to a note from Wedbush, the latest developments give Apple a narrow window (one or two months) to adjust its global supply chain.
India is likely to be a key focus, as Apple expands iPhone manufacturing there in hopes of reducing reliance on China.
The firm, which maintained its $250 price target on Apple stock, described the episode as a “Twilight Zone weekend” for investors, noting that while the policy messages were muddled, the net result is more breathing space.
Crucially, the company will not need to immediately pass steep costs onto US consumers, which could have damaged demand.
Apple is now dealing with a tariff structure that, while far from benign, is at least somewhat manageable in the short term.
Between “base” tariffs and those assigned under Section 232 (a provision typically used for national security-related trade measures), the combined impact is still painful, but not catastrophic, analysts said.
Wedbush noted that the uncertainty comes just as the broader market tries to absorb rising inflation risks and the potential for a slowdown in consumer spending, both of which would disproportionately affect Big Tech.
If the 145% tariffs that President Trump floated against Chinese imports had come into force immediately, Apple would have had no choice but to raise prices significantly.
Instead, it now faces a more staged threat, with the hope that negotiations between Washington and Beijing can cool tensions in the coming months.
Tim Cook, Apple’s chief executive, is said to be working behind the scenes to mitigate the fallout.
Wedbush’s analysts described him as “10% politician, 90% CEO”, a nod to the increasingly complex geopolitical landscape tech leaders must now navigate.
Wedbush sees a range of outcomes for Apple earnings. In a worst-case scenario, 2025 and 2026 earnings could fall 15 to 20% if tariffs stick and demand slumps.
A best-case outcome, with rapid de-escalation, would see a more modest hit of 2 to 5%.
Either way, Apple’s services business and massive installed user base (1.5 billion iPhones, 2.4 billion iOS devices) offer some cushion. But as this weekend showed, even the most powerful tech players are now at the mercy of geopolitics.
Wedbush maintains its 'outperform' rating on Apple stock with a $250 price target.
Ahead of the bell, the shares are indicated to open around 6% higher at $209.30.