Tech behemoth Apple Inc. (NASDAQ:AAPL) is not having a good year on Wall Street. Tariff-induced uncertainties have caused the stock to lose a significant portion of its weight. The share price has fallen by close to 20% this year and is trading below both the 100-day and 200-day moving averages.
At this time, we look into Apple to see whether investors might still consider entering the stock now.
Apple Faces Pressure from the Tariffs
The Trump administration has induced a lot of uncertainty into the market through its tariffs. Via these tolls, the President plans to broker in dozens of trade deals and bring manufacturing back to the U.S.
However, that plan has a few roadblocks along the way. The 90-day pause has been able to achieve some stability in the negotiations but more progress was expected.
The big factor in this has been the resistance from China. The U.S. and its primary foe reached a handshake agreement in early May, but the U.S. has already accused China of violating the agreement.
China, meanwhile, has alleged that the U.S. has undermined the Geneva pact by imposing export controls on computer chips. The country has also been in a tariff stand-off against the European Union.
Apple is caught right in the middle, especially with the U.S. tariff standoff with China. The tech-heavy Nasdaq Composite has had a tumultuous year so far, which means that big tech like Apple has not been performing well. Apple makes about 90% of its iPhones in China, which is strictly under tariff scrutiny.
This has led to the tech giant ramping up exports from another region. Shipments of iPhones from India to the U.S. rose an estimated 76% in April year-over-year. On the other hand, shipments from China over the same period fell about 76% from last year. However, this jump in iPhone shipments from India is not expected to continue so robustly, as there is expected to be pushback from Washington and Beijing.
Counterpoint Research has just lowered the forecasts on big smartphone sellers’ shipment growth. Apple and Samsung came under the forecast axe due to the tariffs. According to Counterpoint Research, Apple shipments are expected to grow only 2.5% this year, down from a previous forecast of 4%. While tariffs played a big factor in this slash, it was exaggerated by the slowing demand that Apple is seeing in North America, Europe, and parts of Asia.
Apple’s Subdued Results
Apple last reported its second quarter results (for the quarter that ended on March 31, 2025). In that, Tim Cook & co. reported $95.36 billion, which was 5% higher than what it was a year ago. This figure was also higher than the $94.66 billion that analysts had been expecting.
Products, which make up the majority of Apple’s top line, showed that its sales rose by 3% year-over-year to $68.71 billion. Its iPad sales grew by 15% year-over-year to $6.40 billion, which was higher than the $6.20 billion that analysts were expecting (according to StreetAccount).
iPhones, which are Apple’s biggest moneymaker, showed sales of $46.84 billion for the quarter, rising 2% from the prior year’s period, higher than the expected $45.84 billion. Sales of Macs for the quarter rose by 7% year-over-year to $7.95 billion, higher than the estimated $7.77 billion.
Due to higher net sales from advertising, the App Store, and cloud services, Apple delivered a 12% growth in its quarterly services revenue to $26.65 billion. While the growth was positive, it was lower than the $26.70 billion that analysts had expected.
Turning to profitability, the gross margin of 47.1% for the quarter was aligned with analyst expectations, while its earnings per share stood at $1.65, growing by 8% year-over-year and higher than the $1.63 forecast.
The company said that tariffs caused a “limited impact” on its business because it was able to optimize its supply chain. However, Apple is also seeing a $900 million added cost for the current quarter. This is also assuming that no new tariffs are imposed.
Apple CEO Tim Cook made it known that his firm is finding it difficult to predict anything beyond June due to the back and forth tariff policy.
What Should You Do with Apple Now?
Apple is a buy now with upside potential to $228 per share according to the consensus of 40 analysts. The high forecast is for $300 per share while the lowest price target is slated at $171 per share.
All in all, big tech remains in a pickle as the tariffs continue to create uncertainty. Apple, being central among them, is also facing the brunt of the attacks as its business remains exposed to the Chinese market.
While Apple’s moat explains why the company continues to grow, this unpredictable nature of the market might create a slowdown in its business.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.