Apple’s Stock Moves off Lows, Remains in Bear Market as China Impact Unknown

Apple's stock price (NASDAQ: AAPL) is trading up 1% in the pre-market today, with the volatility of previous sessions providing more whipsaw than usual. The stock on gained more than 15% on Wednesday following President Trump’s decision to enact a 90-day tariff pause for several countries, although this did not include China.

Despite this temporary relief in the tariff landscape, China continues to be a major factor impacting Apple's future performance. Wedbush analyst Dan Ives has highlighted China as the “biggest X variable” for Apple, primarily due to its significant role in Apple's supply chain and market base. Tariffs on Chinese imports have been raised sharply to 145%, with China imposing their latest reply on U.S goods to 125%.

The challenges in understanding the potential implications of tariffs have continued to push Apple lower, with the stock remaining more than 25% below it's recent high, and firmly in it's own bear market. In response to tariff-related concerns and uncertainty, Dan Ives cut his price target for Apple stock from $352 to $250.

The implications of tariffs are significant. If all iPhones were manufactured in the United States, it is estimated that the retail price could rise to as much as $3,500. In light of these risks, Apple's manufacturing strategy, with its production presence extending to India, Vietnam, and Thailand, has become increasingly critical.

This diversification is viewed as a valuable countermeasure amid the trade tensions with China, and particularly in light of each being granted a temporary reprieve on their own heightened tariffs that were set to come into effect, pre-pause.

In anticipation of tariffs, Apple has been said to have airlifted some 1.5 million iPhones from India to the U.S to avoid them, with Morgan Stanley seeing a potential shift in supply chains to limit future impact. Apple could, it is said, look to move a greater level of production into India, where a 10% flat rate tariff currently applies, as opposed to China, where the 145% tariff could lead to more significant price hikes.

The latest consensus price target on the street of $239.60 remains healthy, yet those to revise, are overwhelmingly moving forecasts down rather than up. Analysts remain cautious about Apple's future, noting that heightened trade tensions could potentially disrupt its supply chain and contribute to a consumer backlash in its crucial Chinese market.

While the temporary tariff pause has been a positive development for Apple, the ongoing issues with China present significant risks to its operation and profitability. Attempting to find certainty in regards to the outlook in particularly uncertain times will likely cause volatility to continue in the days ahead. The stock has most certainly moved off the lows, but is not yet out of the woods.