Forget Tariffs, Why Apple Stock Could Be the Deal of the Decade

Make no mistake about it: tariffs are real and impactful, and they will cause volatility in the financial markets. A case in point is Apple (NASDAQ:AAPL) stock, which got slammed Monday, continuing last week’s deep decline.

So, if I suggest that investors should “forget” about tariffs, I don’t mean it literally. It’s generally a good idea to be aware of current events — and of course, 247WallSt.com is glad to keep you up to date on the latest happenings in the economy and markets.

At the same time, obsessing over the fast-moving changes in the ongoing trade war won’t benefit your financial or mental health. Indeed, if the market is truly efficient in the 2020s, then tariff-induced volatility in Apple stock should be viewed as a rare buying opportunity, not a reason to run for the hills.

Apple Stock Gets Slammed Amid Tariff Turmoil

Just to recap, on April 2, President Donald Trump imposed a baseline 10% tariff on all U.S. trade partners. This includes China, which may be considered America’s most important trade partner.

Trump called this event “Liberation Day,” though it had the knock-on effect of liberating many technology-stock investors from their money. Truly, last week was a bloodbath for the tech-focused NASDAQ 100 index.

While NASDAQ stocks were mostly mixed on Monday, Apple stock remained relatively weak.

From its 52-week high of $260.10, the Apple share price has fallen around 30%. Corrections of 20% in Apple stock don’t happen often; 30% crashes only happen once every few years.

Sure, the Apple share price has recovered from all of its past crashes. But then, the Apple stock bears might contend, “This time, it’s different.”

The current situation could be “different” because it’s hard to predict the scope and duration of the U.S.-China trade war. Already, China has retaliated with a 34% tax/tariff all on U.S. imports, and Trump responded with a threat of 50% worth of additional tariffs on China if it doesn’t withdraw its 34% tax/tariff increase.

A “Complete Disaster” for Apple?

Trump’s tariffs target a wide range of nations, so why are the China-targeted tariffs so impactful for Apple? It’s because, as a manufacturer of electronics, Apple sources some of its materials from China.

Consequently, tariffs on imported electronic components could force Apple to raise its product prices, perhaps by 10% or even 20%. Without a doubt, higher product prices could negatively affect sales and, hence, Apple’s bottom line in 2025.

A pain point for Apple’s shareholders is that there’s no telling how long these reciprocal tariffs will persist, especially since national pride seems to be at stake for the U.S. and China. Craig Singleton, senior China fellow at the Foundation for Defense of Democracies, explains, “The longer this drags, the harder it becomes for either side to deescalate without losing face.”

While Singleton notes the risks to Apple and other U.S. businesses of a prolonged trade war, Wedbush Securities analyst Dan Ives takes on a much darker tone with his commentary on Apple stock. “The tariff economic Armageddon unleashed by Trump is a complete disaster for Apple given its massive China production exposure,” Ives warned.

Along with the “Armageddon” remark, Ives verbally portrayed a close connection between U.S.-China tariffs and Apple’s supply chain. “In our view, no U.S. tech company is more negatively impacted by these tariffs than Apple with 90% of iPhones produced and assembled in China,” he clarified.

And with that, Ives and his colleagues at Wedbush slashed their Apple share price target from $325 all the way down to $250. It shouldn’t be too surprising if the Wedbush analysts reduce their price target again soon, since Apple stock traded at around $181 midday on Monday.

It’s All Baked Into the Apple Pie

With algorithms and high-frequency trading widely available in the 2020s, it’s not only the latest news that gets immediately priced into stocks. Investors’ expectations for what’s coming next are also quickly “baked into the pie,” so to speak, when it comes to stock prices nowadays.

Thus, the efficient market theory states that all available information is immediately priced into financial assets. To this, I would add that the forward-looking market also factors in whatever it expects to happen in the future.

I’m not disputing the idea that a drawn-out Sino-U.S. trade war would be rough for Apple. However, I propose that market participants already know this and have already divested their Apple shares in fear of worst-case scenarios.

This explains why Apple stock dove 30%, a rarely seen event. Skittish, tail-risk-obsessed traders heard what Ives and other Apple bears had to say, and they took the pessimistic arguments to heart.

It also explains how Apple’s trailing 12-month price-to-earnings (P/E) ratio got all the way down to 28.59x. That’s pretty low for a massive, mega-cap U.S. technology firm.

Therefore, it’s not wise to completely forget about the reciprocal tariffs, but it’s also not necessary to panic-sell your Apple shares with every scary headline. Instead, take the “complete disaster” argument into consideration — and then, in light of the efficient market theory, feel free to face the fear and grab some Apple stock before the tariff turmoil subsides.

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