A Wall Street analyst has shared insights on what to expect for Apple (NASDAQ: AAPL) stock as the company navigates the latest wave of American tariffs targeting China.
Given the firm’s deep integration into the Chinese supply chain, Apple remains a key stock to watch amid the evolving trade tension.
The uncertainty stemming from the tariffs, which also affect goods from Mexico and Canada, has led most equities, including Apple, to record notable losses.
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By press time, AAPL stock was valued at $230.78, down over 2% since the last trading session.
BofA analyst updates AAPL stock
In light of this, Bank of America (NYSE: BAC) analyst Wamsi Mohan has maintained a bullish outlook on Apple’s long-term growth, as evidenced by his ‘Buy’ rating with a price target of $265—an upside of over 12%.
Regarding the impact of tariffs on Apple, Mohan outlined two possible scenarios: absorbing costs to maintain U.S. prices or passing them on to consumers. Due to Apple’s strong financial position and strategic pricing, BofA expects minimal impact on earnings.
BofA views the tariff impact as “manageable,” noting that 80% of Apple’s U.S. sales can be sourced outside China, limiting exposure.
“It remains unclear if it can this time around. We analyze impact to earnings if tariffs do impact Apple and 1) Apple maintains existing pricing in the U.S., vs. 2) raises prices. Either way, we see limited impact on earnings,” Mohan noted.
The analyst estimated that if prices remain unchanged, the earnings might hit a minor $0.05 per share. A 3% price hike could offset this, though it may reduce U.S. sales. Given the minimal effect, the BofA expert believes Apple may hold off on price increases.
During Donald Trump’s first term, Apple secured iPhone tariff exemptions, softening the blow. Whether similar relief will be granted this time remains uncertain.
Furthermore, Mohan sees politics influencing Apple’s outlook. He suggested that the Trump administration may ease legal pressures on big tech, potentially benefiting Apple through reduced regulation, particularly under the Digital Markets Act in Europe.
Apple’s iPhone challenges
Given its ongoing challenges in future growth, especially regarding the iPhone market position, the latest analyst insights could be a welcome development for Apple.
Since the rollout of its newest smartphone model, market reception has remained tempered, with analysts citing the lack of artificial intelligence (AI) features, specifically Apple Intelligence, leading to a mixed outlook for the stock.
To this end, Evercore ISI, on January 18, expressed an optimistic view, maintaining a ‘Tactical Outperform’ rating with a $250 target.
Analyst Amit Daryanani expects strong performance despite iPhone demand concerns, citing growth in emerging markets and strength in services and wearables like AirPods and the Apple Watch.
On the flip side, on January 21, Jefferies analyst Edison Lee downgraded Apple to ‘Underperform’ from ‘Hold,’ cutting the price target to $200.75, a potential 12% drop.
Lee cited weak consumer interest in smartphone AI, including Apple Intelligence, and possible delays in Apple’s advanced packaging roadmap, which could further hinder AI adoption in iPhones.
Featured image via Shutterstock
