According to analysts, Apple is likely to be one of the most vulnerable companies if a trade war escalates. This is mostly due to its high dependency on China. With tariffs going up now to about 54% for China, it is possible that Apple’s supply chain and manufacturing operations will be severely influenced.
Key Points On Apple Market Value
- Over the past three trading days, the company’s stock has dropped roughly 20%, erasing nearly $640 billion from its market capitalization.
- Although the broader market was hit hard by the tariff announcements, only three tech megacaps—Apple, Microsoft, and Tesla—closed lower on Monday.
Despite showing some improvement by the end of Monday, compared to the previous two sessions, Apple continued to suffer, with its stock dropping 3.7% as fears grew over the potential effects of President Donald Trumps Tariffs on the company.
The decline in capital value attributable to the Apple Corporation is now at 19% in three days, bringing about a full write-off of $638 billion.
An analyst says that Apple finds itself among the most exposed companies in the event of a trade war mainly due to its heavy dependence on China, which is now facing tariffs as high as 54%. Apple has directed some diversification to countries like India, Vietnam, and Thailand for production, but those regions also face rising tariffs under President Trump’s sweeping trade policy.
Apple is undergoing the worst rough patch among the mega-cap technology companies. On Monday, the only three stocks to dip in that group of seven were Apple, Microsoft, and Tesla.
NASDAQ was just about managing with a slight upswing by the close of business on Monday, managing to edge slightly above the break-even line after plunging by 10 percent last week- this happened to be its worst performance record in more than five years.
Apple would most likely be forced to raise prices or absorb the additional tariff costs once the new duties come into effect, analysts say. According to UBS analysts, the most expensive iPhone from the company will likely see an increase of about $350-30% from its current price tag of $1,199.
Tim Long of Barclays thinks that Apple will increase prices to negate impact due to tariffs; else, the company will see up to 15 percent drop in earnings per share. He also said that Apple would like to explore reconfiguring the supply chain to route imports through countries with lower tariff rates to ease financial stress.
